The dollar took a lead against the euro Wednesday afternoon in New York on a decline in crude oil and gold prices, and a dip in U.S. stocks.
The euro fell to an intraday low of $1.4610 late afternoon in New York, as market sentiment turned against risk after a second day of testimony by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson on the Treasury's $700 billion bailout plan to save the U.S. economy.
The dollar also rose to intraday highs against the Swiss franc and U.K. pound. "At the the moment, the dollar tends to trade pro- and anti-risk," said Tom Fitzpatrick, global head of currency strategy at Citigroup in New York. "When the market gets a little bit nervous, you do see the dollar tend to strengthen."
A sense of suspense about the fate of the Treasury's bailout package kept financial markets, including foreign exchange, volatile and rangebound Wednesday.
The Dow Jones Industrial Average swung inside a narrow range between gains and losses.
"From the currency market perspective, further uncertainty on the timing and the outcome of the congressional vote on the bill will put more pressure on the U.S. dollar in the near term," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank in New York. Meanwhile, currencies are also shaky on lower-than-usual liquidity in the market, which makes them easily susceptible to swings, said analysts. Many are preferring to wait for a clearer signal from Congress. The sensibility among many traders was exemplified in a research note from Goldman Sachs, whose shorter-term trading view transformed Wednesday from a daily list to a single directive: "Stay square."
In addition, another disappointing U.S. housing report served as one more reminder of the U.S.'s economic woes.
Wednesday afternoon in New York, the euro was at $1.4622, down from $1.4707 late Tuesday. The dollar was at Y106.13, up from Y105.32, according to EBS. The euro was at Y155.14, up from Y154.85. The U.K. pound was at $1.8480, down from $1.8575, and the dollar was at CHF1.0913, up from CHF1.0827 Tuesday.
Bernanke urged lawmakers Wednesday to act quickly on the "grave threats" facing the U.S. financial system, warning that inaction could propel the economy into a deeper downturn. Bernanke's remarks seemed to place the burden of action on Congress, not monetary policy, to boost the country's prospects.
Paulson, asked about possible alternatives to the Treasury proposal, said they exist, but that the current situation is unprecedented.
In data, existing-home sales resumed falling in August and prices took a record drop, but in a promising sign inventories decreased sharply. But the euro's movements against the dollar were likely most influenced by a decline in crude oil futures, which shed nearly a dollar a barrel Wednesday. The key commodity-currency relationship has been a driving force in foreignexchange markets, regardless of outside distractions lately.
The dip in oil prices helped to reverse an early-morning advance by the euro against the dollar.
The common currency had been supported into the New York session on a rise in risk appetite that sent investors seeking higher yields on news that famed billionaire investor Warren Buffett's firm Berkshire Hathaway will invest in Goldman Sachs Group Inc. (GS). But the lift in sentiment proved short-lived.
The euro fell to an intraday low of $1.4610 late afternoon in New York, as market sentiment turned against risk after a second day of testimony by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson on the Treasury's $700 billion bailout plan to save the U.S. economy.
The dollar also rose to intraday highs against the Swiss franc and U.K. pound. "At the the moment, the dollar tends to trade pro- and anti-risk," said Tom Fitzpatrick, global head of currency strategy at Citigroup in New York. "When the market gets a little bit nervous, you do see the dollar tend to strengthen."
A sense of suspense about the fate of the Treasury's bailout package kept financial markets, including foreign exchange, volatile and rangebound Wednesday.
The Dow Jones Industrial Average swung inside a narrow range between gains and losses.
"From the currency market perspective, further uncertainty on the timing and the outcome of the congressional vote on the bill will put more pressure on the U.S. dollar in the near term," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank in New York. Meanwhile, currencies are also shaky on lower-than-usual liquidity in the market, which makes them easily susceptible to swings, said analysts. Many are preferring to wait for a clearer signal from Congress. The sensibility among many traders was exemplified in a research note from Goldman Sachs, whose shorter-term trading view transformed Wednesday from a daily list to a single directive: "Stay square."
In addition, another disappointing U.S. housing report served as one more reminder of the U.S.'s economic woes.
Wednesday afternoon in New York, the euro was at $1.4622, down from $1.4707 late Tuesday. The dollar was at Y106.13, up from Y105.32, according to EBS. The euro was at Y155.14, up from Y154.85. The U.K. pound was at $1.8480, down from $1.8575, and the dollar was at CHF1.0913, up from CHF1.0827 Tuesday.
Bernanke urged lawmakers Wednesday to act quickly on the "grave threats" facing the U.S. financial system, warning that inaction could propel the economy into a deeper downturn. Bernanke's remarks seemed to place the burden of action on Congress, not monetary policy, to boost the country's prospects.
Paulson, asked about possible alternatives to the Treasury proposal, said they exist, but that the current situation is unprecedented.
In data, existing-home sales resumed falling in August and prices took a record drop, but in a promising sign inventories decreased sharply. But the euro's movements against the dollar were likely most influenced by a decline in crude oil futures, which shed nearly a dollar a barrel Wednesday. The key commodity-currency relationship has been a driving force in foreignexchange markets, regardless of outside distractions lately.
The dip in oil prices helped to reverse an early-morning advance by the euro against the dollar.
The common currency had been supported into the New York session on a rise in risk appetite that sent investors seeking higher yields on news that famed billionaire investor Warren Buffett's firm Berkshire Hathaway will invest in Goldman Sachs Group Inc. (GS). But the lift in sentiment proved short-lived.
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