Dollar Gains as Signs of Economic Strength May Prompt Fed Change
Finance Monday, March 28th, 2011
By Allison Bennett and Emma Charlton, Bloomberg Businessweek
The dollar strengthened as U.S. consumer spending increased more than forecast in February, and after Federal Reserve official James Bullard said the central bank may consider scaling back its monetary stimulus.
The yen weakened versus most of its 16 major counterparts on signs the global recovery is gaining momentum, boosting appetite for higher-yielding investments. Policy makers should review whether to curtail plans to buy $600 billion in Treasuries because of strong economic data, St. Louis Fed President Bullard said on March 26. The euro depreciated for a second day against the dollar after German Chancellor Angela Merkel’s coalition was defeated in a regional election.
“If you take the Fed speak, coupled with positive data surprises, that could certainly support yields and in turn support the dollar against the yen or the euro,” said Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co. It’s because of the relative shifts in two-year interest rates.”
To read more, visit: http://www.businessweek.com/news/2011-03-28/dollar-gains-as-signs-of-economic-strength-may-prompt-fed-change.html
Short URL: https://reteaparty.com/?p=529
