LONDON: The dollar bounced back sharply against the euro yesterday after weak euro zone industrial orders data but dealers said the markets remain volatile on widespread concerns about the US economic outlook.
They said the dollar had fallen equally far on Thursday after poor US data and fresh worries about the health of the banks but the tables were turned yesterday as stocks rose on hopes struggling US investment house Lehman Brothers would find a savior.
In late London deals, the euro was at 1.4793 dollars, down from 1.4875 dollars earlier and 1.4898 dollars in New York late on Thursday.
Against the Japanese currency, the dollar rose to 109.89 yen from 108.46.
Elsewhere yesterday, the pound dropped close to two-year lows against the dollar on news that Britain’s economy had stalled at zero growth in the second quarter, leaving the country on the brink of recession.
On the London Bullion Market, the price of gold fell to $824 per ounce from $833.50 late on Thursday.
Meanwhile, European stock markets closed sharply higher yesterday.
In London, the FTSE 100 index jumped 2.52 percent to close at 5,505.60 points. In Paris, the CAC-40 rose 2.23 percent to 4,400.45 points and in Frankfurt the DAX gained 1.69 percent to 6,342.42 points. The Euro Stoxx 50 index of leading euro zone companies gained 1.95 percent.
In New York, the Dow Jones Industrial Average was up 136.46 points, or 1.19 percent, at 11,566.67. The Standard & Poor’s 500 Index was up 7.54 points, or 0.59 percent, at 1,285.26. The Nasdaq Composite Index was up 18.95 points, or 0.80 percent, at 2,399.33.
Oil prices fell more than $3 yesterday in a commodities-wide pullback driven by a rebound in the US dollar.
US crude fell $3.07 to $118.11 a barrel at 1630 GMT, after surging nearly 5 percent in the previous session.
London Brent crude fell $2.99 to $117.17 a barrel.
