The greenback turned in another dreadful performance on Wednesday, falling to all major counterparts after the Chinese government signalled it may sell-off its dollar reserves in favor of the stronger euro.
The dollar hit a new all-time low versus the euro in early dealing Wednesday, but firmed up shortly thereafter and saw little movement over the course of the afternoon as US stocks tumbled.
Wall Street stocks moved plunged Wednesday, as concerns about just how far the dollar will fall and renewed worries within the credit markets send stocks lower. Heading into the final hour of trading, the major averages pulled well of their intraday lows that saw the Dow decline 280 points, but continued to post substantial losses.
The greenback fell sharply in overnight dealing and moved even lower until just before the opening bell on Wall Street. The dollar bottomed out at 1.4729, then improved slightly to close near 1.4659.
The European Central Bank is expected to hold its key policy rate at 4.0% Thursday, but analysts also expect more inflation warnings from President Jean-Claude Trichet.
The dollar fell below 2.10 versus the sterling for the first time since 1981, extending a dramatic recent downtrend. The dollar hit a 26-year low of 2.1070 by mid-morning, and held steady near that mark for the rest of the day.
The dollar accelerated to the downside versus the yen Wednesday morning, hitting a 2-month low of 112.76. The pair saw choppy dealing for the rest of the session, ending near the 113 mark.
The Monetary Policy Committee of the Bank of England are due to give their latest decision on interest rates Thursday. Most economists are predicting interest rates will be left at 5.75 percent.
In economic news from the US, the Department of Commerce released its report on wholesale trade in the month of September on Wednesday, showing that wholesale inventories rose much more than expected while wholesale sales also showed a notable increase.
Copper Continues Recent Slump []
Wednesday, November 07, 2007 4:01:19 PM - Copper headed lower again on Wednesday in U.S. trading, easily erasing its gains from the day before. December copper finished at $3.259, down 8.25 cents on the session. The red metal added 3.65 on Tuesday, snapping a six-session losing streak.
The metal has been trending lower for more than a month with ongoing economic concerns in the U.S. Since copper is heavily used in construction, it often moves with economic news, especially housing-related data.
On the economic front Wednesday morning, the Department of Labor released its preliminary report on productivity and unit labor costs in the third quarter, showing that productivity growth exceeded economist estimates while labor costs fell unexpectedly. The report showed that productivity grew by 4.9 percent in the third quarter compared to a downwardly revised 2.2 percent increase in the second quarter.
Economists had expected productivity to grow by about 3.1 percent. The Labor Department also said that unit labor costs fell 0.2 percent in the third quarter following a revised 2.2 percent increase in the previous quarter. The decrease came as a surprise to economists, who had expected labor costs to rise 1.2 percent.
Gold prices continued to soar on Wednesday in U.S. trading and posted a record close. Bullion for December delivery was at $833.50, up $10.10 on the session. The precious metal reached as high as $848.00, a fresh 27-year high. The record high for gold is $875, reached on Jan. 21, 1980. Gold closed that day at $825.50, which was the record close until Wednesday.
The U.S. dollar's continued weakness pushed the price of gold. The greenback dropped again against the euro and touched another record low of 1.4729. The buck also dropped against the British pound and some of the other majors. With the greenback in a prolonged slump, gold has been rallying for more than two months to hit its best levels in more than a quarter-century. Prices climbed earlier in the week amid the ongoing credit crisis in the U.S. Gold closed Tuesday up $14.60 on the session.
In other commodity news, crude oil dropped in afternoon trading on Wednesday as the weekly inventory report failed to produce the data many experts thought would push prices over $100 a barrel. Light sweet crude for December delivery traded at $96.37, down 33 cents on the session. Oil reached a record high of $98.62 in electronic trading.
The Department of Energy's weekly report showed that crude oil inventories fell by 800,000 barrels. While the drop in inventories marked the third consecutive decline, it was much smaller than the decrease of 1.5 million barrels expected by analysts. With the decrease, oil inventories fell to 311.9 million barrels but remain in the upper half of the average range for this time of year.
Many experts felt a greater-than-expected decline would have pushed prices past the $100 a barrel mark. Crude struggled to find direction in the first hour after the report, which came shortly after 10:30 a.m. ET.
Meanwhile, wheat prices fell on Wednesday in U.S. trading, erasing the modest gains it saw the day before. December wheat fell to $7.895, down 7.5 cents on the session. Overall, the grain has struggled ti find direction throughout November. The grain dropped about $1.30 off the price in October to pull away from a record high. Corn for December delivery slipped 1.4 cents to $3.842 a bushel and soybeans for January settlement moved down 6.2 cents to $10.38 a bushel. Cotton, milk and hogs moved higher.
(http://www.rttnews.com)
No comments:
Post a Comment