North-West Financial Broker
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Personal Area
22 Jan - Fundamental
The dollar rose Wednesday as investors sought a safe haven amid continuing concerns abroad, including rumors that Chinese officials have halted bank lending.
What prices are doing: The dollar gained 0.1% on the euro to trade at $1.4092. The U.S. currency rose more markedly against the British pound, gaining 0.6% to $1.6197.
Against the Japanese yen, the dollar fell 0.9% to trade at ¥90.89.
On Wednesday, the dollar rose to its highest level against the euro since August, gaining 1.2%.
What's moving the market: Investors are turning to the dollar and the yen, both considered safe havens, as they shy away from risk on continued global financial concerns. In China, rumors are flying that regulators have told banks to stop lending for at least the rest of January.
If Chinese growth slows, that could hamper overall global recovery. China is a major concern, coupled with worries about other foreign countries — Greece saw its credit rating downgraded in December by Standard & Poor's, Moody's Investors Service and Fitch Ratings.
The greenback had been even higher earlier in the session, but gains were pared after a weekly government report showed U.S. jobless claims rose by more than expected, fueling continued concerns about labor market recovery.
What analysts are saying: «If China's going to continue to tighten their credit, that might take the proverbial punch bowl away from the economy,» said Kevin Chau, foreign currency analyst at IDEAGlobal.
The dollar and yen will continue to profit if these foreign concerns persist, Chau said, as the nascent recovery is increasingly fraught with uncertainty.
