The Post:
The dollar dropped to record lows against the euro on Friday, succumbing to negative sentiment and erasing all of the U.S. currency's earlier gains following a robust U.S. October employment report.
The dollar index, a measure of the U.S. dollar's performance against a basket of currencies, fell to a nine-year low. The U.S. currency also fell to six-month lows against the yen and 6-1/2 month lows against the Australian dollar.
Traders were struck by the dollar's inability to sustain a robust rally fueled by the strong U.S. economic data. An undertow of negative dollar sentiment driven by the U.S. current account and budget deficits made currency investors keen to buy euros, analysts said.
"The price action today is nothing short of stunning," said Richard Franulovich, senior currency strategist with Westpac Banking Corp in New York.
"Net-net, given the sharp U.S. upward revisions to payrolls, for the euro to punch higher to fresh highs is nothing short of spectacular. I think this is a pretty good guide at just how entrenched negative sentiment is toward the dollar," he said.
[See Nov. 3 post:
"We can sell but will they buy?"
[Also, expect interets rates to go way up. Foreign investers will expect a return on their worthless dollars.]
Posted by bushmeister0
at 5:01 PM EST
Updated: Saturday, 6 November 2004 12:58 AM EST