Dollar Drops to Lowest Level Since Lehman Crash
The dollar fell to the lowest level against the currencies of six major U.S. trading partners since the weeks after Lehman Brothers Holdings Inc. went bankrupt as evidence the recession is easing reduced demand for safety.
Sterling jumped to the highest level since October versus the dollar as HSBC Holdings Plc reported an unexpected first- half profit and a survey showed U.K. manufacturing expanded last month for the first time in more than a year. The yen fell against all of its most-traded counterparts as factories in the U.S. contracted in July at the slowest pace in 11 months.
“We are starting to see the dollar sell-off getting more momentum,” said Paresh Upadhyaya, who helps manage $21 billion in currency assets as a senior vice president at Putnam Investments in Boston. “Risk sentiment is very strong now that the global recovery is under way.”
The dollar declined 1.1 percent to $1.4417 versus the euro at 11:16 a.m. in New York, from $1.4257 on July 31. It reached $1.4428, the weakest level since Dec. 18. The yen slid 1.6 percent to 137.14 against the euro from 134.99. Japan’s currency depreciated 0.5 percent to 95.12 against the dollar from 94.68.
The Dollar Index, which the ICE uses to track the U.S. currency against the euro, yen, pound, Swedish krona, Canadian dollar and Swiss franc, dropped as much as 1.1 percent to 77.524, the lowest level since Sept. 29. The gauge plunged 13 percent since March 4, when it reached 89.624, the highest level in almost three years.
Naturally, gold is up as a result. You can only keep the yellow stuff down for so long, PTB...