3/9/2010 Dollar Rebounds On Return To Risk Aversion
| The dollar was generally stronger on Tuesday as equities were poised to struggled for a second straight session, fueling increased risk aversion. With traders concerned about the pace of the global economic recovery, the safe haven dollar and yen gained against higher-yielding counterparts. The euro was notably weaker even after European leaders expressed support for Greece in its bid to get its finances in order. Greek Prime Minister George Papandreou reportedly appealed to U.S. President Barack Obama for help in resolving his country's debt crisis by placing stricter regulations on currency traders and hedge funds. The dollar rose to 1.3550 versus the euro, nearly a penny from a 9-month high of 1.3434 set last week. The dollar also gained on the sterling, bouncing back to a weekly high of 1.4960. The advance took the dollar closer to a 9-month high of 1.4782, set March 1. With commodities prices leveling off, the dollar enjoyed a reprieve versus the resurgent loonie, rebounding above C$1.03 from a 7-week low near C$1.0250. On the flip side, the dollar edged below Y90 versus its Japanese counterpart, which does well on days the greenback is not supported by encouraging economic data from the US. With little first-tier economic data from the US or abroad today, currencies should remain relatively stable, barring a big move in equities. The National Federation of Independent Resources revealed its Small Business Optimism Index lost 1.3 points in February. Looking ahead, the economic news flow from the US picks up on Wednesday with the release of wholesale inventories data. Later in the week, traders will be treated to figures on retail sales and initial jobless claims. |
