Dollar falls to one-month low
Greenback falls as investors seek higher returns after upbeat corporate financial results.
 |
| Click the chart for current FX rates. |
NEW YORK (Reuters) -- The U.S. dollar fell to a one-month low against major currencies on Wednesday, as better-than-expected results from Intel and Goldman Sachs boosted confidence about corporate earnings and the outlook for the economy.
Data showing factories in New York state had nearly recovered from the recession in July also helped lift spirits and stocks on Wall Street.
Meanwhile, safe-haven demand for the dollar declined as investors bought higher-yielding currencies and equities.
"The combination of better-than-expected earnings and supportive data was enough to lead investors to shift money around a bit into different asset classes," said Jessica Hoversen, a fixed-income and currency analyst at MF Global Ltd. in Chicago. "With a higher degree of risk tolerance in the markets, the dollar suffered as investors looked for yield."
In late trading in New York, the euro was up 1% at $1.4111, after touching the day's high around $1.4134, the highest since early July. It rose 1.8% to 133.12 yen while the dollar added 0.8 % to 94.35 yen.
The dollar's losses against the euro held steady, even as the Federal Reserve released economic forecasts for 2009-11 saying the jobless rate could rise above 10% this year.
The Fed "bumped up the unemployment forecast, but unless we see some surprise details on asset purchases, I don't think it's going to change the market's direction," said Brian Kim, a currency strategist at UBS AG in Stamford, Conn.
The pound rose 0.6 % to $1.6414 while an index that measures the dollar against six major currencies slipped 1% to its lowest level since June 11.
The low-yielding yen struggled while the euro rose along with European shares and brushed off a slight annual decline in euro zone inflation.
Increased risk appetite and a rise in the price of oil also lifted the Canadian dollar to a one-month high against its U.S. counterpart.
Analysts said risk appetite was rising on speculation other U.S. firms may post solid second-quarter performance after reports from the two powerhouse firms exceeded forecasts.
"All lights are flashing green for investors to take on risk," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J. "Intel's earnings got things kicked off yesterday."
JPMorgan Chase & Co. (JPM, Fortune 500) will announce results Thursday, followed by Bank of America Corp. (BAC, Fortune 500) and Citigroup Inc (C, Fortune 500). on Friday.
Data from the Bank of New York-Mellon showed the euro was the most strongly net bought major currency on Wednesday, an indication of revived risk appetite.
Higher-yielding currencies also outperformed. The Australian and Canadian dollars, which tend to do well when investors' taste for risk grows, each rose more than 1% against the greenback. Actively traded emerging markets currencies, such as the Brazilian real and the South African rand, also advanced.
Elsewhere, data Wednesday showed China's currency reserves surged to $2.13 trillion last month. The yuan hit a two-week closing high at 6.8316 per dollar on Wednesday, its highest close since July 2. 
-
These 5 cities have the fastest-growing foreclosure rates. And they're not the usual suspects. More -
Now you can get the $8,000 credit through June 2010 -- or $6,500 if you're not a first-time buyer. More -
Home prices are forecast to plummet, but these 7 cities are predicted to post gains. More -
Home prices have grown in the beer-guzzling heartland and fell in the wine-sipping coastal states. More -
Investors think Detroit's foreclosed houses are a deal. Would you buy this one for $6,900? More -
Economic growth, affordable wages -- these spots have what entrepreneurs need to thrive. More
