Wednesday, 25 Nov 2009

EUR Reaches beyond $1.5100

The Dollar declined beyond $1.51 per EUR Wednesday and is trading near a 14 year low versus the Yen on better than expected economic data signals from the Federal Reserve that it will tolerate a weaker greenback, encouraging investors to buy higher-yielding assets outside the U.S.

The Dollar dropped 1.3% to 87.32. The Dollar depreciated to $1.5142 per EUR, It weakened beyond $1.51 for the first time since August 2008. The EUR decreased 0.2% to 132.20 Yen. The drop in the USD versus the Yen reiterates the assumption that the USD has become the favorite currency for carry trades.

The U.S. Labor Department reported weekly jobless claims fell under 500,000 for the first time in nearly a year. Consumer Spending rose 0.6% in October, as expected. Furthermore, a gauge of U.S. consumer sentiment was revised to a higher than expected level and sales of new homes jumped in October. However, orders for durable goods fell 0.6%.

Gold climbed to the highest price ever, reached a record $1,189 an ounce and capping the longest rally in 27 years fueled by the continuous slump in Dollar value