The dollar rose against the euro for a second day as a sell-off in
global stocks prompted investors to buy the greenback as a haven. The
U.S. currency extended its gain as crude oil fell below $70 a barrel
for the first time since August 2007.
Gold losses extending to below $790 now as liquidations continue.
``The flight to liquidity and safety is supporting the dollar,'' said
Matthew Strauss, senior currency strategist in Toronto at RBC Capital
Markets Inc., a unit of Canada's biggest bank by assets.
Crude oil for November delivery fell as much as 7.2 percent to a
13-month low of $69.15 a barrel after a U.S. government report showed a
bigger-than-forecast increase in inventories. The euro-dollar exchange
rate and oil have had a correlation of 0.8 in the past year, according
to Bloomberg calculations. A reading of 1 would mean they moved in
lockstep.
The dollar pared its gain versus the yen after the Philadelphia Fed
reported that its factory index dropped to minus 37.5 this month, the
lowest reading since October 1990, from 3.8 in September. Negative
readings signal contraction. The index averaged 5.1 last year.
U.S. stocks retreated after Citigroup Inc. said loss rates on credit
cards and mortgages may climb to records and the manufacturing data
spurred concern the economic slump is getting worse. The S&P 500
Index dropped 3.7 percent after plunging 9 percent yesterday.