RTN:Dollar Gains On Euro As China Hikes Interest Rate
RTTNews) - The dollar was generally stronger Wednesday morning in New York, gaining significant ground against the euro after another Chinese interest rate hike fueled concerns about the global recovery.
The buck also received support from Congressional discussion of a corporate tax holiday on foreign profits, which would see repatriation of funds back to the U.S.
The Chinese central bank raised its interest rates for the third time this year on Wednesday amid high inflationary pressures.
The People's Bank of China raised the benchmark deposit and lending rates for financial institutions by 25 basis points.
The dollar rose to a weekly high of $1.4314 versus the euro, up more than a penny from its overnight lows.
Moody's Investors Service on Tuesday downgraded Portugal's credit rating to junk status on the growing risk the country will need a second round of official financing and that it will not be able to meet deficit reduction targets.
The buck improved to $1.60 versus the sterling, a penny from last week's multi-month high near $1.5911.
The buck was steady near Y81 versus the yen, and edged slightly higher to C$0.9660 versus the Canadian dollar.
U.S. mortgage applications decreased last week, as rising interest rates cooled demand for refinancing, industry data showed Wednesday.
The Mortgage Bankers Association's seasonally adjusted index of mortgage application activity fell 5.2 percent last week.
The Institute for Supply Management is scheduled to release the results of its non-manufacturing survey at 10 am ET. The non-manufacturing index is expected to slip back to 54 in June from 54.6 in May.
