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Tags: Dollar

Dollar Gains Continue As Wholesale Inflation Rises

Thursday, 18 February 2010 09:24 AM

The dollar extended its gains Thursday morning after the government said wholesale inflation increased and concerns on Greek debt continued to weigh on the euro.

The dollar leapt on Wednesday after several government reports showed signs of economic improvement and minutes from the Federal Reserve's January meeting debated plans to withdraw emergency stimulus money from the economy.

The 16-nation euro fell to $1.3567 in morning trading in New York from $1.3618 late Wednesday. That's not far off a 9-month low of $1.3533 from Feb. 12. The euro has tumbled since it traded at just over $1.51 in November because of ongoing concerns about swelling budget deficits in several of its member countries, particularly Greece.

Worries over the credibility of Greece's bookkeeping are making the case for the European currency worse, said Brown Brothers Harriman currency analysts in a research note Thursday morning.

Meanwhile, the British pound dropped to $1.5575 from $1.5686, but the dollar slid to 90.63 Japanese yen from 91.15 yen.

Against a basket of six currencies, the dollar was up 0.3 percent.

On Thursday, the Commerce Department said wholesale prices jumped 1.4 percent in January as energy costs rose — double what private economists had expected.

The Fed has been able to keep interest rates at a very low rate near zero in part because inflation has been so tame. But a big run-up in costs could prompt the central bank to start tightening credit earlier.

Higher interest rates, or the expectation of higher rates, tend to boost a currency as investors transfer funds in search of higher returns.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FinanceNews
The dollar extended its gains Thursday morning after the government said wholesale inflation increased and concerns on Greek debt continued to weigh on the euro.The dollar leapt on Wednesday after several government reports showed signs of economic improvement and minutes...
Dollar
260
2010-24-18
Thursday, 18 February 2010 09:24 AM
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