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Euro down against dollar on US officials' remarks, despite spike in US trade deficit

Euro down against dollar on US officials' remarks, despite spike in US trade deficit

The euro fell further against the dollar Tuesday as markets digested remarks made by U.S. officials that offered support to the beleaguered American currency.
The euro bought US$1.5509 in afternoon European trading, down from US$1.5652 Monday night in New York.
U.S. President George W. Bush, who is currently touring Europe, said on Monday that "a strong dollar is in our nation's interests" and those of the global economy. On Tuesday, however, Bush essentially rejected the idea of possible government intervention to prop up the dollar's value, saying that world economies would end up setting the currency's value.
Comments Monday by U.S. Treasury Secretary Henry Paulson and New York Federal Reserve President Tim Geithner also fed a rally by the dollar, which has been hovering near all-time lows against the euro amid worries over the U.S. economy and an aggressive Fed interest rate-cutting campaign.
"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."
Geithner said the central bank must pay attention to the dollar, and that tighter monetary policy may be necessary.
The rally continued despite a report from the U.S. Commerce Department Tuesday that the gap between what the U.S. imports and what it sells abroad rose by 7.8 percent in April to US$60.9 billion (euro39.34 billion), the largest imbalance since March 2007, driven by an increase in crude oil imports.
The British pound also fell against the dollar, buying US$1.9550 in afternoon European trade, compared with US$1.9751 late Monday.
The dollar also rose against the Japanese currency, climbing to 107.08 yen from 105.10 yen.


Updated : 2021-07-31 13:47 GMT+08:00