The dollar rose to the highest level
against the euro in more than a week as leaders of the Group of Eight nations
convened in Japan
and a report showed German industrial production unexpectedly fell in May. President
George W. Bush, in Japan for
the G-8 summit, reiterated support yesterday for a ``strong'' U.S.
currency.
The dollar strengthened versus the euro on speculation U.S. officials will try to stem gains in oil
prices as the G-8 summit gets under way in Japan. Bush said yesterday
on the first day of his five-day trip to Japan
that the U.S.
will continue to pursue a strong dollar.
The U.S. currency also
appreciated as crude oil fell after Iran's Foreign Minister Manouchehr
Mottaki expressed confidence in talks with Western governments on the country's
nuclear program. Organization of Petroleum Exporting Countries President Chakib
Khelil said yesterday record oil prices are more related to the dollar exchange
rate than supply.
Federal Reserve Bank of San Francisco President Janet Yellen said today
in San Diego that the central bank ``will not
allow a wage-price spiral to develop'' and that U.S. economic growth will ``pick
up'' next year.
The euro dropped against the dollar as German industrial production
unexpectedly dropped 2.4% in May, its third straight decline, prompting
traders to pare bets the European Central Bank will raise the main refinancing
rate for a second time this year.
The yen weakened against the euro and the dollar as global stocks
advanced on retreating oil prices, reviving demand for higher-yielding assets.
EUR/USD printed lows $1.5609
before rising to $1.5750, triggering somestops and offers. Later rate corrected to $1.5712.
GBP/USD tested $1.9650 before
rising to $1.9790. Later rate back to $1.9750.
USD/JPY set highs on Y107.75
before falling to Y106.70. Later rate rebounded to Y107.30.
Today’s focus will be on US later data from housing sector – at 14:00 GMT Pending home sales report will be released.