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Dollar mixed as roaring markets foil 'safe' choice

Dollar mixed as roaring markets foil 'safe' choice

The dollar traded mixed against the major currencies Tuesday as stock markets worldwide mostly shot higher during a day light on economic data.
A memo from Citigroup Inc. Chief Executive Vikram Pandit saying the beleaguered bank was running an operating profit of $8.3 billion revved up U.S. equities, sending all the major indexes soaring more than 5 percent.
The dollar has tended to benefit from falling equities as a haven, as investors desert stocks for U.S. government debt. Money flowing back into equities _ both at home and abroad, as was happening on Tuesday _ can leave the dollar softer.
While an increased taste for risk may prevail _ increasing demand for commodities currencies such as the New Zealand dollar _ "we remain fairly skeptical about the risk appetite that has returned to the market," said Matthew Strauss, senior currency strategist at RBC Capital in Toronto.
"We still believe that sentiment remains very fragile. We could see a very quick turnaround on any major developments, either in North America or anywhere else in the world."
The 16-nation euro edged up to $1.2637 in New York trading from $1.2629 late Monday.
A European Central Bank official, Axel Weber, said Tuesday he would like the euro zone's key interest rate to have a floor of 1 percent.
Last week, the ECB cut its main refinancing rate by a half percentage point to 1.5 percent.
Lowering interest rates tends to weaken a currency as investors move funds to where they earn better returns.
Weber spoke at the press conference following the release of 2008 earnings for Bundesbank, the German central bank.
The British pound slipped to $1.3723 from $1.3800 on Monday, while the dollar was unchanged at 98.85 Japanese yen.
The dollar also came off its multiyear highs Monday against other North American currencies. It fell to 1.2881 Canadian dollars from 1.2959 late Monday. The buck had hit a more than 4-year high of 1.3064 Canadian dollars earlier Monday.
The dollar slipped to 15.3335 Mexican pesos from 15.4265 late Monday. On Monday night, the greenback also hit a record high of 15.5911 pesos. The peso has lost about 30 percent of its value against the dollar in the past year, even as its central bank has auctioned off more than $18 billion in foreign currency reserves since October to try to prop up its value.
In other New York trading, the buck advanced Tuesday to 1.1637 Swiss francs from 1.1587 francs.


Updated : 2021-04-14 07:22 GMT+08:00