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Dollar recoups some losses vs. euro after gov't officials lend support to strong US currency

Dollar recoups some losses vs. euro after gov't officials lend support to strong US currency

After last week's plunge, the dollar climbed against the euro in late New York trading as several government officials and President George W. Bush voiced their support for a strong American currency.
The 15-nation euro slid to $1.5652 in late New York trading from $1.5768 late Friday.
On Monday, Treasury Secretary Henry Paulson told CNBC television that he would not rule out currency intervention as a policy tool in order to steady the dollar.
"I would never take intervention off the table or any policy tool off the table," Paulson said. "I just can't speculate about what we will or won't do."
Meanwhile, New York Federal Reserve President Tim Geithner said in a speech in New York that the central bank must pay attention to the dollar, and that tighter monetary policy may be necessary.
Higher rates, or a tightening policy, can fight inflation and support a currency, while lower interest rates can force down a currency as investors seek higher-yielding assets.
Also on Monday, Bush said "a strong dollar is in our nation's interests. It is in the interests of the global economy...the long-term health and strong foundation of our economy will shine through and be reflected in currency values."
Bush's statement is somewhat unusual, as he does not regularly comment on currency matters.
Last week, Fed Chairman Ben Bernanke also voiced support for a strong currency.
The British pound rose to $1.9751 from $1.9713 late Friday, as the dollar bought 106.10 Japanese yen, up from 105.10 yen in New York.
Also propping up the dollar were unexpectedly positive housing data. The National Association of Realtors' index of pending home sales rose to 88.2 in April, its highest reading since October. The results beat economists' expectations.
On Thursday, the dollar started sliding after European Central Bank President Jean-Claude Trichet the ECB could increase interest rates in July to counter rising inflation.
Friday's triple-whammy of unemployment data, surging crude futures and a plunge on Wall Street furthered the dollar's battery.


Updated : 2021-04-18 16:35 GMT+08:00