Dollar hits 9-month high
The dollar reached a nine-month high against the euro on Monday. Here
are the causes that are
On Friday April trade gap figure -- the difference between imports and
exports -- came in line of the expectation of Wall Street economists and
was viewed as confirming the economy's strength. The trade deficit in
April widened 6.3% to $57.0 billion, the largest increase since last October.
So far in 2005, the trade deficit is up 12.6% from the pace a year ago. The
U.S. trade gap was a record $617.58 billion in 2004.
The dollar also benefited from hopes for more U.S. rate increases and a
hint from a European Central Bank official that the ECB could cut its rates.
The dollar also rose 0.7% to 109.50 yen, near its strongest standing in 8
months.
The dollar has been rising at the euro's expense in recent sessions.
Rejections of the proposed E.U. constitution by French and Dutch voters
raised questions about the pace of market reforms and the integration of
member states. Recent soft data in a number of E.U. states also pressured
the euro. The euro's losses were also compounded by market rumors that
the E.U. could break up and opportunists are seizing a chance to dump the
euro.
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