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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (44410)	8/22/2003 3:08:49 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Dollar hits four-month high against euro By Andrei Postelnicu in New York and Neil Dennis in London Published: August 21 2003 20:53 \| The dollar hit a four-month high against the euro on Thursday, breaking back through the $1.10 to the euro level, as markets reacted to positive indications about the US economy and more downbeat news from the eurozone. Encouraging US unemployment data and other indicators contrasted with confirmation from Germany that its economy shrank by 0.1 per cent in the second quarter of the year. The news fuelled a sense in the markets that the world is heading for another period of unbalanced growth, with the US leading a strengthening global recovery, and Europe lagging behind. The euro fell to its lowest since April, dropping to just above $1.09 at one point, compared to the peak of more than $1.19 it reached in May. Mark Cliffe, chief economist at ING Financial Markets, suggested the August holiday conditions were partly responsible. "The head traders are returning and looking to set up new strategies. They are seeing this US recovery story is kicking in more convincingly, so they buy dollars," he said. First-time applications for unemployment benefits fell last week in the US to their lowest level since early February. "It looks like we're seeing a stabilisation in the labour market, and that's very important because as the economy was accelerating in the second quarter...the labour market was still decelerating," said Diane Swonk, chief economist at Bank One. Business surveys in the eurozone have also been improving in recent months, encou raging hopes that an upturn may also be on the way there, but recent output data have dampened expectations. www.ft.com