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Dollar Falls to Near 2009 Low as Economy Pares Refuge Demand

Oliver Biggadike and Matthew Brown
Bloomberg [1]
Monday, July 27, 2009

The dollar fell to near the lowest level this year against the currencies of six major U.S. trading partners on speculation the global economy is shaking off the worst recession since World War II, sapping safety demand.

The U.S. currency traded near a seven-week low versus the euro after a report showed sales of new homes rose the most in eight years. The yen fell against all of its major counterparts as global shares gained and analysts raised their profit estimates for U.S. companies for the first time in two years.

“Some of the safe-haven positions in the U.S. dollar are being unwound, and that’s putting pressure on the greenback,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “The market is feeling more optimistic on the prospects for the global economy and essentially is taking on more risk.”

The Dollar Index, which the ICE uses to track the greenback against currencies including the euro, yen and pound, fell 0.2 percent to 78.566 at 10:04 a.m. in New York. It reached 78.334 on June 2, the lowest level since falling to 77.688 on Dec. 18. The dollar slid 0.4 percent to $1.4263 per euro and earlier depreciated to $1.4298, the weakest level since June 3. The yen declined 0.7 percent to 135.62 per euro, from 134.63. The dollar bought 95.29 yen, compared with 94.79 on July 24.

Full article here [1]