Currencies: End to Election Brings No Support for Dollar
After five weeks of a weakening dollar being blamed on the presidential race, the end to the election has brought no support for the U.S. currency.
Political certainty was expected to strengthen both the equity markets and the currency markets, but Dow futures are 75 points in the red this morning.
"The anticipatory nature of the markets suggests the news was already discounted...especially in the foreign exchange market," the Mellon Global FX News and Views report wrote this morning.
The dollar was weaker versus most major currencies prior to the morning's Account Deficit report. There was little change in currency values after the report was released.This morning's report reflected the belief that inflation is not a worry right now. The November Producer Price Index increased by 0.1%, while the Core PPI for November remained unchanged. The number of jobless in the country dropped to 320,000 from 352,000. The only upward move in the dollar today is against the yen. "There's a sense that there is an increase of capital flow out of Japan, and an increase into Europe," said Paul Podolsky, currency strategist at Fleet Bank. The dollar hit 16-month highs versus the yen for the second day in a row this morning. The dollar/yen cross was recently at 112.59, up from yesterday's close of 112.36. The dollar is falling against other major world currencies. As expected, the European Central Bank left interest rates unchanged at their meeting today. The euro was trading at $0.8839 recently, up from $0.8766 at yesterday's close. The euro/yen cross continues to creep up today, trading at 99.47, from a close yesterday of 98.43. The British pound is strengthening against the dollar, recently trading at $1.4676 from $1.4553, up over a penny on this morning's news. The Australian dollar is moving up on the U.S. currency, recently at $0.5416 from a close yesterday of $0.5396. Canadian consumer prices rose sharply in November. The U.S. currency was recently trading at C$1.5210, down slightly from yesterday's close of C$1.5216. Back to top
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