Dollar moves higher in quiet trade

Published December 31, 2005

LONDON, Dec 30: The US dollar moved higher against the euro on Friday, the last trading day of 2005, and would start 2006 in a stronger position compared with the start of the year, dealers said.

The euro dipped to 1.1831 dollars in early European trading from $1.1844 late on Thursday in New York.

The dollar eased to 117.38 yen from 117.81 on Thursday, as the greenback was hit by profit-taking ahead of the year-end.

Nothing is happening. No economic data is scheduled in the United States and the majority of investors will take the afternoon off, noted Canadian Imperial Bank of Commerce economist Audrey Childe-Freeman.

With Japanese and Asian markets closing early, and many market participants away on a festive break, trade flows were thin.

It would seem that the foreign exchange market will finish the year on a rather calm note Childe-Freeman said, adding that trading volumes were approximately 70 per cent lower than normal.

Higher US borrowing costs in 2005 have handed the European single currency its first annual loss against the dollar in four years.

The euro has shed over ten per cent of its value against the dollar during 2005.

The greenback has been buoyed for most of 2005, following a three-year

downturn, by a growing focus on interest rate differentials around the world.

Earlier this month, the US Fed lifted the benchmark rate by a quarter point to 4.25 per cent and analysts’ consensus forecast is for borrowing costs to peak next year at 4.75 per cent, followed by a pause.

The European Central Bank, meanwhile, was expected to raise interest rates again next year, after increasing its key refi rate by a quarter of a percentage point to 2.25 per cent in November — the first increase in more than five years.

The dollar’s rebound during 2005 followed three years during which the US unit struggled owing to concerns about gaping shortfalls in the US current account and trade balance.

The euro was changing hands at $1.1831 against 1.1844 late on Thursday in New York, 138.93 yen (139.53), 0.6859 pounds (0.6865) and 1.5569 Swiss francs (1.5564).

The dollar stood at 117.38 yen (117.81) and 1.3158 Swiss francs (1.3140).

The pound was being traded at $1.7251 (1.7247).

On the London Bullion Market, the price of an ounce of gold stood at $513.20 compared with $513 late on Thursday.—AFP

Opinion

Editorial

Spy games
Updated 02 Oct, 2022

Spy games

The audios leaked so far appear to have been carefully curated: they apply pressure but do not do major damage.
‘Geopolitical football’
02 Oct, 2022

‘Geopolitical football’

THE US-China rivalry is by all measures one of the globe’s most dangerous competitions for power and influence. ...
Fuel price reduction
02 Oct, 2022

Fuel price reduction

ISHAQ Dar is back; so are his signature policies. The reduction of a little over 5pc in fuel prices announced by him...
Untruths and politics
Updated 01 Oct, 2022

Untruths and politics

It would arguably be in the national interest for the Supreme Court to take up the cipher and settle the matter.
Farmers’ protest
01 Oct, 2022

Farmers’ protest

SEVERAL hundred farmers have converged on Islamabad for the last three days to protest against the soaring costs of...
Dasht-i-Barchi bombing
01 Oct, 2022

Dasht-i-Barchi bombing

ON Friday morning, Kabul’s Dasht-i-Barchi neighbourhood was rocked by a terrorist attack targeting an educational...