Dollar Jumps, Aided by Data
The dollar jumped to one-month highs against the euro and yen Friday on hard evidence that the U.S. economy isn't about to shrivel into recession.</br></br>New economic reports demonstrated the Federal Reserve's actions this week -- cutting interest rates a conservative quarter point and finding an alternative method to introduce more market liquidity -- were well-founded considering retail sales and inflation data reported Thursday and Friday, according to analysts.</br></br>"The Fed was roundly condemned on Tuesday afternoon for its seemingly detached attitude towards the crisis of confidence in the bank funding market," said Scotia Capital analysts.</br></br>But the reports have introduced some clarity -- and struck U.S. equities down in the process on the realization that another Fed rate cut might not be such a simple prediction, currency analysts concluded. The dollar, consequently, shot up against the euro with a newfound yield appeal and against the yen with the help of a negative economic report in Japan.</br></br>Late Friday in New York, the euro was at $1.4423 from $1.4625 late Thursday, while the dollar was at 113.40 yen from 112.22 yen. The pound was at $2.0172 from $2.0398, while the dollar was quoted at 1.1525 Swiss francs from 1.1413 francs.