Alexa
  • Directory of Taiwan

Euro drifts lower against US dollar

Euro drifts lower against US dollar

The euro drifted lower against the U.S. dollar Thursday as a report showed the U.S. economy grew at its strongest pace in more than a year.
The 13-nation euro bought US$1.3632 in afternoon European trading, down from US$1.3645 in New York late Wednesday. The British pound dropped to US$2.0136 from US$2.0151.
The U.S. Commerce Department said that gross domestic product, the broadest measure of economic health, expanded at an annual rate of 4 percent in the April-June quarter, significantly higher than the 3.4 percent rate the government had initially estimated a month ago.
But the growth spurt could be short-lived. There are concerns that the recent turmoil in financial markets, a result of a spreading credit crisis, could seriously dampen economic activity in the second half of this year.
On Wednesday, Federal Reserve Bank Chairman Ben Bernanke noted that the bank was "prepared to act as needed" to ensure credit market troubles did not expand further, fueling speculation that a U.S. interest rate cut could be in the offing next month from the current level of 5.25 percent.
Analysts also have raised doubts about prospects of the European Central Bank raising its key refinancing rate to 4.25 percent next month, following mounting problems with credit availability.
Higher interest rates, used to combat inflation, can strengthen a currency by giving investors higher returns on investments denominated in it.
The dollar edged higher against the Japanese currency, rising to 115.71 yen from 114.88 after Vice Finance Minister Horoki Tsuda said the ministry would keep a close eye on financial markets and subprime mortgage concerns.
"I will watch moves of stocks and foreign exchange markets closely as well as various economic indicators," he told reporters in Tokyo on Thursday. "But basically, the Japanese economy remains on a long-lasting recovery path."


Updated : 2021-05-06 21:34 GMT+08:00