Dollar Heads for Biggest Quarterly Gain Versus Euro Since 2008

[TomCADem]

Source: Business Week

March 27 (Bloomberg) -- The dollar rose, poised for the biggest quarterly gain versus the euro since 2008, as European leaders’ struggle to forge a plan to bail out Greece pushed investors toward the perceived safety of the greenback.

The yen fell against all 16 of its most-traded counterparts this week as Japanese consumer prices dropped for a 12th month, increasing the chances the nation’s central bank will lag behind its peers in raising interest rates. The U.S. economy added jobs in March, a report is forecast to show next week.

“The dollar is still the safety currency,” said Jonathan Xiong, a senior portfolio manager and director at Mellon Capital Management Corp. in San Francisco, where he helps oversee $18 billion. “The European news that is coming out is unclear, clouded and uncertain. When investors are uncertain, what happens is they buy dollars.”

The dollar appreciated 0.9 percent to $1.3410 versus the euro, from $1.3530 a week earlier. It was headed for a gain of 6.8 percent for the quarter, the largest since it advanced 11.8 percent in the three months ended in September 2008.

Read more: http://www.businessweek.com/news/2010-03-27/dollar-heads-for-biggest-quarterly-gain-versus-euro-since-2008.html

[wroberts189]

1. interesting knr/nt

[aquart]

2. Is that why olive oil is so cheap this week?

[On the Road]

3. It's Good News,

but the Euro is still overvalued. A dollar and a Euro have roughly equal purchasing power at home. The 30-40% difference is due to sounder fiscal policy by the EU, especially the Germans.

Looks like the basic situation will be with us for a while. Even with deficit cutting and economic growth, it will still take a decade or so to get the debt under control.

[JNelson6563]

4. Good news.

:-)

[goclark]

5. But I just heard M$M say that we were in $$ trouble

and to be "afraid."
:scared:

They said the Health Care Bill will put us in debt forever!

[CHIMO]

6. Has The Idea

Occurred to anyone that Euro countries might want a lower Euro?

[amandabeech]

9. Well, they won't get that until the Germans leave.

Meanwhile, the euro is cheaper than the DM would have been, most likely.

That gives a major lift to German manufacturing exports.

Maybe we really should merge our currency with the Mexican peso. It's hard to imagine Canada going along, but such a move would certainly take down the dollar.

Of course, the Chinese and others would still maintain their pegs.

[tinrobot]

7. Looks like I picked a good month to go to Europe.

[KurtNYC]

8. enjoy

[theophilus]

10. Is this really true?! It seems like only yesterday (or the day before) that

many on DU were talking collapse and economic destruction. Oh well. It's nice to hear good news but I won't be surprised if some come by and warn "just you wait, we're all doomed." Thanks for posting.