CNNMoney.com
Companies Economy International Corrections Pre-market Trading After-hours Trading Winners/Losers/Actives Bonds Currencies Commodities World Markets Money Magazine Real Estate Taxes Jobs Ask the Expert Money 101 Autos Mutual Funds The Help Desk Loan Center Best Places to Live Ask the Expert Ultimate Guide to Retirement Retirement Calculators Best Funds Best Places to Retire Fortune Brainstorm Tech Apple 2.0 Blog Big Tech Blog Sectors and Stocks Tech Talk Resource Guide Small Business Makeovers Questions & Answers Small Business Video 100 Best Places to Launch FSB 100 Fortune Small Business Fortune 500 Brainstorm Tech Investing Management C-Suite Rankings Main Create Portfolio Edit Portfolio Create Alerts Edit Alerts
Currency Center

Dollar falls as Goldman feeds risk appetite

U.S. data beat expectations, but corporate earnings anxiety limits gains.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

dollar_euro.gif
Click the chart to view foreign exchange rates.
Photos
10 countries, 10 solutions
A financial crisis has engulfed countries from the best-off to the worst-off around the world. The solutions to the problem are varied.
What's most important to you when choosing where to live?
  • Good jobs
  • Affordable homes
  • Top schools
  • Low crime
  • Things to do

NEW YORK (Reuters) -- The yen fell on Tuesday as earnings of Goldman Sachs surpassed expectations, stoking modest hopes for an economic recovery and boosting investors' appetite for stocks and higher-yielding assets.

But traders were cautious ahead of earnings news from other U.S. banks while lackluster data from Germany weighed on the euro, keeping it rooted in a broad range against the dollar.

The slight rise in risk appetite supported higher-yielding currencies and those tied to commodity prices such as the Canadian dollar, which hit a three-week high earlier against the greenback.

The Japanese yen and the U.S. dollar tend to fall when risk appetite rises as investors target higher-yielding currencies and assets such as stocks and commodities.

A report on Tuesday showed better-than-expected June U.S. retail sales, but traders noted that much of the 0.6% rise in retail sales was driven by higher gasoline prices.

"Retail sales were better than expected, so that's a bit of good news, but there has been little follow-through as the market is uncertain which way it wants to trade," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.

Salvaggio also said that data showing a sharp rise in U.S. producer prices last month, which pushed government bond yields to rise, may stoke inflation fears.

Other traders noted the thin summer trading conditions, which adds up to a euro stuck in a broad $1.3850-$1.4050 range.

In late afternoon trading in New York, the euro was 0.3% lower at $1.3940 and slightly higher against the yen at 130.12 yen.

Against the yen, the dollar rose 0.4% to 93.35 yen.

A 33% rise in Goldman Sachs' (GS, Fortune 500) quarterly earnings lifted some spirits, though market participants remained cautious ahead of reports this week from other banks, including Citigroup Inc. (C, Fortune 500) and JPMorgan Chase & Co (JPM, Fortune 500).

"The focus will remain for now on corporate earnings, with U.S. equities likely to be the biggest factor weighing on the greenback." said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon.

"If earnings disappoint, as many suspect, the dollar has room to rally on rising risk aversion and falling stock prices," he added. "If earnings exceed expectations, the dollar may come under renewed selling pressure."

High-yielders

Currencies seen as higher risk did better as the Canadian dollar rose more than 1% to a three-week high of C$1.1345 per U.S. dollar.

Australia's dollar rose 0.8% to $0.7894, and sterling added 0.3 % to $1.6282. Strong Australian business confidence data and better-than-expected UK retail sales and home price data added to demand for both.

The euro's woes were tied partly to a monthly poll of economic sentiment from German think-tank ZEW, which defied upbeat market expectations and fell for the first time since October.

The ZEW report "was much lower than what was expected, but it is still a figure that shows more optimism than pessimism toward economic recovery," said Dan Cook, a senior market analyst at IG Markets Inc. in Chicago.

Investors' attention now will turn ahead to readings on U.S. consumer prices, industrial output and minutes from the Federal Reserve's last policy meeting all due on Wednesday. To top of page

Track 17 major currencies

Features
Markets Last Change
Dow Jones 10,226.94 203.52 / 2.03%
Nasdaq 2,154.06 41.62 / 1.97%
S&P 500 1,093.08 23.78 / 2.22%
10-year Bond 101 4/32 Yield: 3.48%
U.S.Dollar 1 euro = $1.498 -0.002
November 9, 2009 12:00 AM ET
CompanyPrice% Change
Sprint Nextel Corp 3.28 15.09%
Radioshack Corp 20.23 14.04%
TRW Automotive Holdings Corp 22.95 11.46%
Unisys Corp 33.82 9.13%
Nov 9 3:53pm ET †
More Galleries
What I bought with my $8,000 tax credit These 7 new homeowners stepped up their house-hunting to take advantage of the first-time buyer tax credit. More
Then and now: 'The worst slum in America' Charlotte Street in New York City's South Bronx was once world famous for its blight. Now it's a slice of suburbia in the inner city - complete with Beemers and boats. More
Hope for homeowners Critics thought homeownership would never work in the South Bronx. They were wrong. Tour the one house currently for sale on Charlotte Street. More

Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
© 2009 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy
Copyright © 2009 BigCharts.com Inc. All rights reserved. Please see our Terms of Use.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc.
Intraday data provided by Interactive Data Real-Time Services and subject to the Terms of Use.
Intraday data is at least 20-minutes delayed. All times are ET.
Historical, current end-of-day data, and splits data provided by Interactive Data Pricing and Reference Data.
Fundamental data provided by Morningstar, Inc..
SEC Filings data provided by Edgar Online Inc..
Earnings data provided by FactSet CallStreet, LLC.