The dollar edged higher against the euro Thursday, as dealers cut bets against the U.S. currency a day ahead of the U.S. jobs report for January that may shed light on how close the economy is to recession.
The dollar fell sharply against the euro on Wednesday after the Federal Reserve slashed benchmark interest rates by 50 basis points and said downside risks remain for growth.
The dollar edged up against the euro and yen Tuesday after a mixed bag of U.S. economic data led dealers to trim their bets against the currency ahead of Wednesday's policy decision by the Federal Reserve.
The dollar rose Friday as investors scaled back bets for another aggressive Federal Reserve interest rate cut next week and on optimism a $150 billion stimulus package would help support the U.S. economy.
The dollar fell against the euro on Thursday as strong German business confidence data andtough inflation comments by a European Central Bank policy-maker dashed hopes for a near-term interest rate cut in the euro zone.
Euro zone growth could come in below 2 percent this year, European Central Bank Governing Council member Klaus Liebscher was quoted as saying on Thursday, but the region is better off than the United States.
The yen rose across the board on Wednesday as falling European stocks encouraged investors to reduce exposure to risky assets and unwind carry trades despite the Federal Reserve's hefty interest rate cut.
The dollar tumbled against the euro Tuesday after the Federal Reserve unexpectedly slashed its benchmark overnight lending rate in an attempt to allay market fears of a U.S. recession.
The low-yielding yen rose broadly on Monday, hitting a 2-1/2 year peak versus the dollar and five-month highs against the euro as investors shunned risky trades amid a sell-off in global stocks.
The dollar gained against the euro and yen Friday as rising equity markets calmed investors, prompting a few to edge back into relatively risky carry trades.
The dollar dropped Thursday after Federal Reserve Chairman Ben Bernanke told a congressional committee that more interest rate cuts may be necessary and that the U.S. economic outlook has worsened.
The euro zone's trade surplus shrank more than expected in November amid a strong euro as imports grew faster than exports, the European Union's statistics office said on Thursday.
The euro plunged against the U.S. dollar after a European Central Bank official told Bloomberg News the central bank may revise down its euro zone growth forecasts for 2008.
The dollar Tuesday fell to its lowest against the yen since June 2005 and extended declines against the euro after U.S. retail sales data provided further evidence an economic slowdown was spreading to the consumer.
Important economic data will compete with Citigroup's much-anticipated earnings report ahead of Tuesday's opening bell. Retail sales data is being particularly watched to see if it is weak enough to prompt the Fed to cut rates even before its regular meeting at the end of the month.
The dollar dropped to a record low versus the Swiss franc and seven-week lows against the euro and yen on Monday as concern that weak U.S. corporate earnings will prompt more interest rate cuts weighed on the currency.
The haves and have nots this earnings period could come down to who has the biggest foreign exposure. Look what happened with IBM today. The weak dollar is its friend.
The yen strengthened across the board on Friday as global equity markets sagged on renewed fears that the U.S. financial sector may suffer even more losses, diminishing investors' risk appetite.
When central bankers speak, markets listen. That's why we're all waiting for Fed Chairman Ben Bernanke's comments on the economy at 1 p.m. today. But it looks like European Central Bank President Jean-Claude Trichet beat him to the punch.
The euro climbed across the board Thursday, after European Central Bank President Jean Claude-Trichet flagged more interest rate increases in the euro zone, citing lingering inflation pressures.