Dollar Advances Against All Its Major Rivals Because of Strong U.S. Economic Data
Associated Press
Tuesday May 14, 6:23 pm Eastern Time
NEW YORK (AP) -- The dollar advanced against all its major rivals Tuesday with confidence in the U.S. currency enhanced by stronger-than-expected U.S. economic data and a continuing rally in major stock indexes.
A 1.2% increase in U.S. retail sales for April gave the dollar further momentum in New York, taking the euro to lows of the day at 90.12 cents and pushing dollar/yen as high as 128.79.
Overall, the dollar was able to make across-the-board gains of about 1%, with the recently strong Swiss franc taking a hit as dealers backed away from risk-averse strategies.
In late New York trading the dollar was quoted at 1.6151 Swiss francs, up from 1.5949 late Monday.
"There's a nice combination of a strong stock market and a growing U.S. economy, and that's contributing strongly to the dollar," said Ashraf Laidi, chief currency analyst at MG Financial in New York.
U.S. equities have continued to give the dollar solid support, rallying again Tuesday on the back of strong gains Monday. At the close in New York, the Dow Jones Industrial Average was up about 189 points, after Monday's 170-point gain.
Analysts say that the dollar's gains are as much a product of the lack of convincing alternatives as on its own merits.
"Anybody who looks at the euro can't get too comfortable with a long euro position," said Andrew Busch, director of foreign exchange at Bank of Montreal in Chicago.
In late New York trading, the euro was quoted at 90.25 cents, down from 91.20 cents late Monday.
The yen lost ground to the dollar all day, initially falling in Tokyo trading as the market digested reports that ratings agency Moody's Investors Service has sent a letter to Japan's Ministry of Finance, responding to a request that it clarify its ratings decisions.
The timing was seen as significant, as Moody's had been expected to announce a downgrade of Japanese debt by at least one notch Monday. However, that key decision has now been rescheduled to May 31.
In late New York trading, the dollar was quoted at 128.59 yen, up from 127.70 yen late Monday.
Also Tuesday, a top official of Japan's Ministry of Finance again underlined the MOF's desire to see a weaker yen.
"Looking at the fundamentals there is absolutely no reason for the yen to strengthen," said Haruhiko Kuroda, vice finance minister for international affairs.
In late New York trading the British pound was quoted at $1.4492, down from $1.4571 late Monday. The U.S. dollar traded at 1.5584 Canadian dollars, up from 1.5559.
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