Associated Press
Dollar slips on strong German consumer news
By ERIN CONROY , 12.22.08, 05:41 PM EST
The dollar slipped against the euro and the British pound but rose against the Japanese yen Monday after a German survey showed consumer confidence is stabilizing in the European Union's largest economy. Bleak news from Toyota Motor Corp. and Walgreen Co. also weighed on the dollar.
The 15-nation euro rose to $1.3958 in late New York trading Monday from $1.3887 late Friday. The pound inched up to $1.4865 from $1.4859.
Drug store operator Walgreen (nyse: WAG - news - people ) said Monday profit fell 10 percent in its fiscal first quarter, due mostly to the costs of opening more than 200 new stores. Toyota (nyse: TM - news - people ), meanwhile, said it will report its first operating loss in 70 years.
Meanwhile, a survey by the GfK research group said its forward-looking consumer climate index for Germany stood at 2.1 points in Januray - flat from December and an indication that lower inflation is offsetting fear of unemployment there, despite the nation's descent into recession. Declines in consumer prices and energy costs helped preserve a willingness to buy, the survey showed.
Also Monday, Japan's finance ministry said it posted a trade deficit in November as exports plunged on falling demand amid a deepening global recession. The deficit totaled 223.4 billion yen ($2.5 billion) as exports dropped by 26.7 percent from a year earlier to 5.3 trillion yen ($60 billion), marking a record fall.
The dollar advanced to 90.07 Japanese yen from 89.45 yen late Friday. On Wednesday, the dollar bottomed at 87.11 yen, a 13-year low.
The greenback sank last week after the Federal Reserve cut rates to a range from 0 to 0.25 percent and announced it would take other, unprecedented moves to inject liquidity into markets and jumpstart lending. The dollar started to recover, however, after the U.S. government's announcement of $17.4 billion in emergency loans for Chrysler LLC and General Motors Corp. (nyse: GM - news - people )
The ECB also said last week that it would increase the interest rate it charged banks to borrow from the ECB, while lowering the rate paid on deposits parked within the bank. The changes would take effect Jan. 21 after the ECB's next meeting Jan. 15, when the refinancing rate could change.
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