New York: The dollar slid yesterday as improved bank and technology earnings, strong retail sales and accelerating economic growth overseas drove traders into riskier investments such as commodities and emerging-market currencies.
Markets are also waiting to hear the latest Congressional testimony from Federal Reserve Chairman Ben Bernanke. Recent signs of improvement in the US economy could prompt the Fed chair to signal an upcoming change in interest rate policy — although that is not expected.
Higher interest rates tend to increase the dollar's value as they can make dollar-denominated investments yield higher returns.
In morning trading in New York, the 16-nation euro rose to $1.3635 (Dh5) from $1.3594 late Tuesday. The European currency has been moving higher since European leaders and the International Monetary Fund released details of a rescue plan for Greece if needed.
The dollar dropped against nearly all the most active currencies yesterday, except for the Japanese yen, as the government said US retail sales jumped 1.6 per cent last month, more than economists had estimated. Better-than-expected earnings from important US companies JPMorgan Chase and Intel also weighed on the safe US currency.
The British pound rose to $1.5449 from $1.5375. The dollar was lower against currencies from developing countries in Latin America and Asia. The Mexican peso and the Brazilian real rose after strong retail sales data from Brazil. Singapore's extremely fast growth during the first quarter and an upgrade for South Korea's credit rating from Moody's Investors Service helped send Asian currencies higher.
