Dollar Climbs on US Interest Rate Prospects

Author: 
Agencies
Publication Date: 
Wed, 2005-10-19 03:00

LONDON, 19 October 2005 — The dollar firmed against the euro here yesterday and hit its highest level in two years against the yen on US data that bolstered prospects for continued US interest rate hikes this year.

The single European currency in late-day trade was at 1.941 dollars after 1.2022 late Monday in New York. The dollar was meanwhile trading at 115.70 yen against 114.91 on Monday. The greenback at one point rose to 115.94 yen, its best showing since September 8, 2003. The dollar was also buoyed by news that the United States continues to attract more than enough money to finance its huge trade deficit.

The euro was changing hands at 1.1941 dollars against 1.2022 late on Monday in New York, 138.15 yen (138.17), 0.6825 pounds (0.6854) and 1.5553 Swiss francs (1.5546). The dollar stood at 115.70 yen (114.91) and 1.3017 Swiss francs (1.2922). On the London Bullion Market, the price of an ounce of gold slipped to $472 from $474.50 late on Monday.

Meanwhile, European stock exchanges wilted yesterday, with the London shedding 0.43 percent to close at 5,263.9. In Paris the CAC 40 fell 0.63 percent to 4,461.14 while in Frankfurt the DAX gave up 0.64 percent to end the day at 4,947.18. The Euro Stoxx 50 index of leading euro zone shares fell 0.65 percent to reach 3,334.79.

In New York, Wall Street sputtered in late morning trade yesterday after a report showing a big jump in wholesale prices sapped sentiment after a slew of positive earnings reports. The Dow Jones Industrial Average drifted up 11.68 points (0.11 percent) to 10,359.78 and the NASDAQ crept higher by 1.99 points (0.10 percent) to 2,072.29 at 1525 GMT. But the main broad-market indicator, the Standard and Poor’s 500 index, fell 2.30 points (0.19 percent) to 1,187.80.

Asian stocks closed mixed yesterday. In Tokyo, the Nikkei-225 index lost 48.05 points to 13,352.24. In Seoul, the KOSPI index closed up 9.86 points at 1,186.22. In Hong Kong, the Hang Seng Index closed up 56.05 points at 14,597.40.

In Singapore, The Straits Times Index fell 4.38 points to 2,284.16. In Kuala Lumpur, the Composite Index shed 1.63 points to 922.64. In Manila, the Composite Index fell 0.13 points to 1,947.33. In Bombay, the 30-share Sensex fell 80.37 points to 8,122.25.

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