Forex Top Story

Dollar Hits Yearly Low Versus Euro As Risk Appetite Rises
(RTTNews) - Rising risk appeal drove the dollar to a yearly low versus the euro on Wednesday. Improving stocks and renewed optimism about the prospects of a V-shaped economic recovery offered further support for higher-yielding currencies
ndustrial production increased for the second consecutive month in August, according to a report released by the Federal Reserve on Wednesday, with the rate of growth coming in above the expectations of economists.

Yesterday, Federal Reserve Bank Chairman Ben Bernanke said that the U.S. financial system is beginning to emerge from a deep recession that is "technically over."

The dollar dropped through support versus the euro to hit 1.4736, its lowest level since last September. With the loss, the dollar continued to edge toward a record low near 1.6000 last July.

Eurozone inflation stayed negative for the third month in August, data released by the Eurostat confirmed Wednesday.
The consumer price index fell 0.2% year-on-year in August after dropping 0.7% in July. That matched a preliminary estimate released on August 31. A year ago, the rate of inflation was 3.8%.

The dollar came within a whisper of its yearly low versus the loonie before finding support. A move below C$1.0630 would take the buck to its lowest since last September.

The dollar also edged lower versus the yen, hitting a new 8-month low of 90.11. Back in January, the dollar dropped to a 13-year low of 87.08. The Bank of Japan will make its latest interest rate decision on Thursday.

Against the sterling, the dollar failed to move out of its range near 1.6500.

Looking ahead to Thursday, the Department of Labor reports on initial jobless claims for the week ended Sept. 12. Economists expect 555,000 claims, up from 550,000 the previous week.

by RTT Staff Writer

Posted in: Business-Economic,World News