Wednesday, August 23, 2006


US Dollar Down On Economic Worries

Forbes reports on the currency trades. "The U.S. dollar was lower against other major currencies in late European trading Wednesday. The euro traded at $1.2805, up from $1.2796 late Tuesday in New York. Later, in midday trading in New York, the euro fetched $1.2788. In midday New York trading, the dollar bought 116.42 yen and 1.2355 Swiss Francs, while the pound was worth $1.8917."

From Bloomberg. "Canada's dollar gained for a third day, touching a six-week high, as reports pointed to a continued expansion of the nation's economy. 'There is a lot of corporate demand for the Canadian dollar below C$1.1140, and that's driving the currency higher today,' said Jonathan Gencher, VP of foreign exchange sales at BMO Capital Markets in Toronto. 'The bigger economic picture still favors the currency; we'll continue to see a slow but steady appreciation of the Canadian dollar this year.'"

"Canadian dollar's gains this year have also come as the price of crude oil jumped 17 percent, partly on concern Iran may curb shipments. 'The Canadian dollar has clearly outperformed other major currencies today,' said John Rothfield, a senior currency strategist at Bank of America Corp. 'Investors are getting more comfortable with the Canadian dollar when the energy security is worsening. Some people are putting option- based trades because the Canadian dollar tends to do well when oil prices rise.'"

"The yen reversed Tuesday's losses against the greenback Wednesday in New York. The Japanese yen showed steady gains against the dollar throughout overnight trading and into the early morning hours. The Japanese currency held steady against the greenback for several hours. However, amid the release of U.S. existing new home sales data, the yen edged lower against its U.S. counterpart. As of 2:50 pm ET, the U.S. dollar was worth 116.33 yen."

From MarketWatch. "Gold futures fell Wednesday to their lowest level in three sessions as traders reacted to moves in the U.S. dollar following a drop in existing-home sales. Adding pressure to metals prices, oil futures dropped on the heels of a climb in last week's gasoline inventories."

"Gold for December delivery closed down $1 at $633 an ounce on the New York Mercantile Exchange. It finished at its weakest closing level since Friday, after trading as high as $639.80 during the day, its highest intraday level since Aug. 17."

"'Gold traders are gearing up for a move back above $650 as Iran has sent the clear message that it will not stop enriching uranium and as the Fed signals that more rate increases may be needed,' said Kevin Kerr, editor of a newsletter published by MarketWatch. 'Gold thrives off such uncertainty.'"

"'$700+ is still our target by years end, if not even higher. Individuals who were kicking themselves the last time gold ran to $700 should take a long hard look at the buying opportunities in gold right now, they may not last,' he said."

"Other metals ended on a mixed note Wednesday. September silver added 25 cents to close at $12.515 an ounce after a high of $12.68, a level it hasn't seen since late May. October platinum fell $1.30 to end at $1,236.50 an ounce and September palladium rose $3.90 to close at $346.85 an ounce."

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