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Tuesday 07th of October 2008
July 27, 2006

US dollar weakens on evidence of slowed growth


by Elaine Frei

The US dollar weakened on Thursday as the Federal Reserve’s “Beige Book” report, released on Wednesday, provided anecdotal evidence that US economic growth is beginning to slow even though a new report showed that durable goods orders were up more than expected while unemployment levels were down.

The greenback was down 1.5 percent in the past two days to 115.44 versus the Japanese yen, while it has dropped 1.3 percent in the past two days to sterling, to $1.8633, and is 1.4 percent lower in relation to the Australian dollar in the same period, declining to $0.7630 to the Aussie.

The euro remained about the same in relation to the US dollar after having gained 1.1 percent against the greenback on Wednesday, as it sat at $1.2732 on Thursday. The euro was also lower against the yen, down 0.5 percent to ¥147.10. The shared currency also dropped 0.3 percent against both the Swiss franc and sterling, to SFr1.5728 against the franc and to £0.6834.

In China, the renminbi hit a new high versus the US dollar since its revaluation last year as it hit Rmb7.9748. Two US senators have said that they will advance their legislation to put a 27.5 percent tariff on Chinese goods sold in the United States if China does not raise the value of the renminbi “significantly” by the end of September.

The Norwegian krone added 0.4 percent to NKr7,8911 to the euro as unemployment there dropped to its lowest level in five years. Meanwhile, the New Zealand dollar dropped 0.4 percent to $0.6194 to the US dollar as the Reserve Bank implied that interest rates won’t soon rise there.

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