"We continue to get strong economic releases out of the United States," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. Analysts said the weak German business sentiment underscored the impact of tensions surrounding Russia and Ukraine on Germany, Europe's biggest economy.» Read More
For the week ending Friday, March 07, 2008 the US Markets all ended the week down close to 3% or greater. The Dow closed below 12,000, the NASDAQ breached its 52-week low, and the S&P 500 closed below 1300 for the first time since September 11, 2006. In contrast commodities continue to hit new record highs, and the US dollar fell to record lows on a weak economy. Bernanke hinted at further rate cuts, the ECB held rates steady, and jobs unexpectedly fell, heightening fears that the US economy has hit a recession. Many economists are no longer questioning a recession, but how long it will last.Next week, the markets will watch for Retail Sales on Thursday and earnings from some of the smaller retailers, while inflation watchers await the CPI report on Friday, seen rising again in February. If consumer prices rise beyond comfort levels, the spectre of stagflation, price inflation amidst weak economic growth, will again rear its head.
The dollar rebounded from record lows triggered by a surprise contraction in U.S. payrolls for a second straight month as attention shifted to moves by the Federal Reserve to ease tight liquidity conditions.
The European Central Bank holds rates steady on Thursday and Bernanke suggests further rate cuts in the US, all sending the US dollar lower, and the euro and pound higher. According to Reuters, Bernanke indicated in his testimony before congress that he was more concerned about US economic growth than inflation, which erodes confidence in US assets and the demand for dollars to buy them.
By many measures, confidence in the dollar has never been lower, and some fear more Federal Reserve interest rate cuts will make matters worse by swelling inflation and undermining long-term U.S. economic health.
The battered U.S. dollar may be near the bottom of its weakening cycle, but a recovery rally will take a while to materialize, because big uncertainties still hang over the U.S. economy, analysts told CNBC.com.
The dollar extended losses against the euro and the yen Thursday after U.S. pending home sales were unchanged in January, doing little to allay investor worries over the deteriorating U.S. economic outlook.
The ECB and the BOE left interest rates unchanged on Thursday, as fears of inflation outweighed worries that the U.S. economic woes may spread around the world.
The European Central Bank's surplus fell to 286 million euros ($439 million) last year from 1.37 billion euros in 2006, because of the euro's strength, the bank said on Thursday.
The dollar hit a fresh record low against the euro and a basket of currencies Wednesday, on renewed concerns about the health of the U.S. economy.
The foreign exchange maneuver known as the carry trade looks set to continue unwinding, with bearish investors scared of risks. But buying opportunities might emerge from the trend, analysts told CNBC on Wednesday.
The dollar turned higher against the yen on Tuesday as U.S. stocks trimmed losses late in the afternoon on talk of a bail-out for bond insurer Ambac.
Worried euro zone policymakers pressured on Washington on Tuesday to do more to halt the dollar's decline, a day after the U.S. currency hit a record low against Europe's single currency.
The dollar halted a sharp sell-off against the euro and a basket of major currencies on relief that U.S. manufacturing had not deteriorated as much as expected.
The dollar spiraled lower as worries about the US economy depressed the currency and raised thorny issues in Europe about how to cope with the growing gap.
Plans for sweeping federal programs that would aid troubled mortgage borrowers would bring unfair relief to speculators and reward investors who made bad bets, U.S. Treasury Secretary Henry Paulson said Thursday.
The dollar dropped to record lows against the Swiss franc Thursday as U.S. stocks fell following comments from Federal Reserve Chairman Ben Bernanke suggesting the possibility of more U.S. bank failures.
The U.S. Dollar continues to lose ground against major currencies with the Dollar index multi-year lows, and the Euro hitting new highs against the dollar. Are there ways to profit from the weak dollar? CurrencyShares ETFs might provide a few options.
Market expectations that the European Central Bank will cut interest rates fail to consider the dangers of higher inflation, ECB Governing Council member Axel Weber said on Wednesday.
The dollar sank to a new low against the euro after the chairman of the Federal Reserve Bank said Wednesday that the U.S. would encounter more sluggish economic activity in the coming weeks and months.
The euro's exchange rate is shaped by the market but excessive volatility is unwelcome, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said on Wednesday as the euro hit record highs against the dollar.