Sunday, Aug 31, 2008
The dollar posted its biggest monthly advance against the euro since the European currency’s 1999 debut on evidence economic weakness that began in the U.S. spread and as crude oil prices declined.
The greenback increased against all of the other major currencies in August, climbing for a fifth straight month versus the yen. The pound depreciated the most against dollar since 1992, when financier George Soros made $1 billion breaking the Bank of England’s defense of the British currency.
“The situation in the rest of the world is deteriorating much faster than the market was expecting,” said MatthewStrauss, a senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada’s biggest bank by assets, in an interview on Bloomberg Television. “The gains in the U.S. dollar were more by default.”
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The dollar climbed 6.3 percent to $1.4673 per euro yesterday, from $1.5603 on July 31. It touched $1.4571 on Aug. 26, the strongest level since Feb. 14. The U.S. currency advanced 0.8 percent to 108.80 yen, from 107.91, in the longest stretch of monthly gains since January 2002. The euro fell 5.2 percent to 159.40 yen, from 168.39, the biggest monthly drop since March 2004.
The ICE futures exchange’s Dollar Index, which gauges the greenback against the currencies of six major U.S. trading partners, rose 5.3 percent this month. It reached 77.619 on Aug. 26, the highest this year.
This article was posted: Sunday, August 31, 2008 at 3:27 am