MW: Dollar gains; Merkel offers Greece little comfort
Greenback’s little fazed by stronger-than-expected durables orders
By Sarah Turner, MarketWatch
FRANKFURT (MarketWatch) — The dollar rose against major rivals Friday as the euro slipped after German Chancellor Angela Merkel offered little indication Germany is willing to give Greece more time to implement austerity measures.
The ICE dollar index DXY +0.33% rose to 81.578, up from 81.368 in late North American trading Thursday.
By Sarah Turner, MarketWatch
FRANKFURT (MarketWatch) — The dollar rose against major rivals Friday as the euro slipped after German Chancellor Angela Merkel offered little indication Germany is willing to give Greece more time to implement austerity measures.
The ICE dollar index DXY +0.33% rose to 81.578, up from 81.368 in late North American trading Thursday.
Strategists said a perceived lack of direction by euro-zone leaders left the currency vulnerable to giving back some of its recent gains.
Annalisa Piazza, strategist at Newedge Strategy, noted that Merkel’s comments were no tougher than usual.
Also Friday, the British pound GBPUSD -0.20% extended a decline, falling to $1.5838 from $1.5866 on Thursday.
Earlier, the U.K. Office for National Statistics raised its estimate of second-quarter gross domestic product to show a 0.5% quarterly decline. The ONS previously estimated a 0.7% contraction for the U.K. economy.
Meanwhile, the Australian dollar AUDUSD -0.44% slipped $1.0392, off from $1.0443 late Thursday.
“This currency is unusually strong, given what’s happening [to commodity prices]…The market is wrong, and the currency should be lower. I think momentum is going to build where the market will build in greater pessimism,” said Paul mackel, HSBC’’s Hong Kong-based head of Asian currency research.
And against the Japanese yen, the dollar USDJPY +0.05% bought ÂĄ78.46, little changed from ÂĄ78.48 in late trading on Thursday.
However, HSBC expects the dollar to fall to ¥74 by the end of the year, as Mackel noted that Japanese policy makers haven’t responded fast enough to developments.
“That will probably continue to be the case. … Not stepping on the accelerator with policy implies that the yen will be pretty strong,” he said.
Mackel said HSBC’s view on the yen also takes into account an expectation that the dollar is facing headwinds — including the coming U.S. presidential election — that may push the greenback lower.
Sarah Turner is MarketWatch's bureau chief in Sydney.
