Dollar Loses Ground To Euro, Yen As Stocks Gain

Wed, Aug 19 2009, 19:16 GMT
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Dollar Loses Ground To Euro, Yen As Stocks Gain

By Bradley Davis Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--The euro is up Wednesday afternoon against the dollar, tracking a rise in U.S. stocks.

The euro's uptick bucks the sentiment set overnight in Asian trading, when a selloff in stocks sent currency traders into the safe-haven dollar and yen.

The euro reached a session high of $1.4268 around midday in New York trading, according to EBS via CQG.

The common currency found additional support on a rise in crude oil futures after the Department of Energy reported a decline in crude oil inventories.

Also, traders likely piled into the euro after it hit some closely-watched technical levels. Thin, summer trading conditions may have exaggerated the effect on the market, particularly as much of the activity occurred around the exit of the London session.

Wednesday afternoon in New York, the euro was at $1.4240, up from $1.4135 late Tuesday, according to EBS via CQG. The dollar traded at Y93.98, down from Y94.70, and the euro was at Y133.83, little changed from Y133.84. The U.K. pound has fallen slightly to $1.6540 from $1.6571, and the dollar was at CHF1.0644, off from CHF1.0757. However, ongoing economic uncertainty is still apparent in the market as the euro looks under pressure against the yen.

In earlier trade, the yen had moved to its highest levels in about a month versus the euro and dollar. The euro fell as low as Y132.17, while the dollar fell to Y93.66. "The yen is notably outperforming the dollar in the safe-haven currency race, perhaps owing to lingering doubts about the U.S. economic prospects," said Vassili Serebriakov, Wells Fargo currency strategist.

Although the euro has recovered overnight losses against the dollar, the U.K. pound remains under pressure after the release of the latest Bank of England meeting minutes. It showed policy makers debated increasing the U.K.'s bond-buying program even more than they actually did - a sign that quantitative easing won't soon cease. This reversed some pound-bullish bets activated Tuesday on stronger-than-expected U.K. inflation data.

By Bradley Davis, Dow Jones Newswires; (212) 416-2654; bradley.davis@dowjones.com

(Riva Froymovich in New York and Don Curren and Paul Evans in Toronto contributed to this report.)

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(END) Dow Jones Newswires
August 19, 2009 15:16 ET (19:16 GMT)
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