Friday, May 29, 2009
The U.S. dollar fell to five-month lows against a basket of currencies Friday as an advance in global equities and signs of an easing global recession drove investors to snap up higher-yielding currencies and riskier assets.
Global stocks rose and some equities markets posted 2009 highs, diminishing the safe-haven allure of dollar assets and sending the euro to a 2009 high against the dollar. A government report showed the U.S. economy contracted slightly less than initially estimated in the first quarter but the market had expected evidence of a shallower recession.
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“The dollar is being slapped around,” said Boris Schlossberg, director of foreign exchange research at GFT in New York. Analysts such as Schlossberg noted that as global risk appetite increases, the dollar may start reacting negatively to lackluster domestic economic reports. “The market is now getting realistic about this (U.S.) recovery.”
The dollar index, a gauge of the U.S. currency’s performance against six major currencies, was more than 1 percent lower at around 79. Earlier in the session it hit 79.372, its lowest since mid-December. It is now down more than 6 percent for the month, on track for its biggest monthly fall since 1985.
This article was posted: Friday, May 29, 2009 at 9:20 am