Published: Tue, 28 Apr 2009 13:57:34 +0200

Greenback Remains Stronger as Swine Flu Continues to Work Through Markets

(CEP News) - The U.S. dollar is broadly stronger on Tuesday, except against the Japanese yen, as the effects of the swine flu continue to work their way through the financial markets on Tuesday.

After holding an emergency meeting on Monday, the World Health Organization raised its pandemic threat level on the swine flu from three to four, citing "evidence of increased human-to-human transmission".

Japan Finance Minister Kaoru Yosano said it is difficult to judge how the swine flu will affect the Japanese economy and that the pandemic needs to be viewed and confronted as a global problem.

Citing early results from the stress tests, the Wall Street Journal said both Citigroup and Bank of America have been told to increase their capital cushions. Both firms are planning to refute the findings.

On the equity market front, U.S. equity market futures are lower with contracts on the Dow Jones Industrial Average down 112 points to 7890, the S&P 500 down 15 points to 842 and the Nasdaq down 18 points to 1356.

In an interview with PBS's Charlie Rose, French Finance Minister Christine Lagarde said she expects the U.S. dollar to remain the world's "reserve currency" in the near future and that "everyone has an interest" in a strong U.S. currency.

Meanwhile, the Confederation of British Industry's retail sales balance rose to +3% in April, its highest level since January 2008. Expectations were for a -40% level following March's -44% print.

At 7:54 a.m. EDT.

Euro/USD down 0.55 cents to 1.2981

USD/CAD up 0.37 cents to 1.2245

USD/Yen down 0.48 points to 96.28

GBP/USD down 0.49 cents to 1.4596

AUD/USD down 0.83 cents to 0.7018

The U.S. Dollar Index is up 0.15 points to 85.90

By Erik Kevin Franco, efranco@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca