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| Dollar retreats as global stocks slump |
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Time is GMT + 8 hours
Posted: 20-Nov-2008 20:14 hrs |
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| A woman holds several Euro and US dollar notes. The dollar dipped against the euro and yen as currency investors monitored sliding global stock markets |
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The dollar dipped against the euro and yen on Thursday as currency investors monitored sliding global stock markets, dealers said.. In morning London trade, the euro rose to 1.2527 dollars from 1.2508 late in New York on Wednesday.. Against the Japanese currency, the dollar fell to 95.40 yen from 95.77 yen on Wednesday.. Global stock markets tumbled on Thursday, with Tokyo losing nearly seven percent and European indices deep in the red after sharp overnight losses on Wall Street and amid a fresh wave of major job cuts.. New York stocks had plunged to five-and-a-half-year lows on Wednesday after data revealed a sharp deterioration in the world's largest economy and the Federal Reserve admitted the risk of a long recession.. On Thursday, Tokyo closed down a huge 6.89 percent, Hong Kong shed 4.0 percent, Seoul dived 6.7 percent, and Sydney slid 4.2.. "The collapse of financial stocks in the US has brought back to the fore the issue of bank solvency which could have a substantial impact on risk appetite and general market conditions," said Derek Halpenny, European head of global currency research at The Bank of Tokyo-Mitsubishi UFJ in London.. "Increased fears of default will reinforce demand for the yen," he added.. Such worries have been supporting the yen as investors see the Japanese currency as a relatively safe haven in the global financial storm.. The yen also shrugged off news that Japanese exports dropped at the fastest pace in almost seven years, pushing Asia's largest economy deeper into recession.. The US economy continued to churn out bad news. The US consumer price index plunged 1.0 percent in October -- the steepest one-month fall since the data was first published in 1947 -- stoking deflation fears, official data had revealed Wednesday.. The Federal Open Market Committee meanwhile signalled in minutes from its October policy meeting that it would make further reductions to its key lending rate, which is already at a record low of 1.0 percent.. Meanwhile, dealers were closely watching developments in the car sector as the heads of the Big Three US automakers -- General Motors, Ford and Chrysler -- appealed to Congress for loans to prevent their industry from collapsing.. Dealers also digested the latest data from Germany, which is the eurozone's biggest economy.. Official data showed that German producer prices gained 7.8 percent in October on a 12-month basis but were unchanged from September.. Analysts polled by Dow Jones Newswires had forecast a drop of 0.7 percent on the month along with a more modest annualised increase of 7.1 percent.. In September, wholesale prices in the biggest European economy had risen by 0.3 percent and by 8.3 percent respectively.. In foreign exchange trade on Thursday, the euro changed hands at 1.2527 dollars against 1.2508 dollars late on Wednesday, at 119.45 yen (119.82), 0.8427 pounds (0.8356) and 1.5181 Swiss francs (1.5163).. The dollar stood at 95.40 yen (95.77) and 1.2126 Swiss francs (1.2119).. The pound was at 1.4847 dollars (1.4960).. On the London Bullion Market, the price of gold dropped to 744.60 dollars an ounce from 762 dollars late on Wednesday. — AFP
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