 Forex - Dollar rebound on view that Fed would hike rate later this year |
 May 20 2008, 1:00
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The Dollar rebounded from a 2-1/2 week low versus the Euro on Monday after a key forecasting gauge unexpectedly rose in April, suggesting that a sharp economic downturn in the US might be nearing a bottom. That eased fears about consumer confidence and reassured investors that the Federal Reserve would have room to hike interest rates later this year.
FX Traders also attributed the Dollar's rebound to position squaring after last Friday's sharp sell-off, sparked by a report showing a sharp drop in consumer confidence to a 28-year low in May. Minutes from April FOMC meeting are due on Wednesday, and investors will look for additional confirmation that the Fed has finally moved to the sidelines. German ZEW and Ifo sentiment indexes are due this week. This could boost the Euro by reinforcing the case for the European Central Bank to leave rates on hold a while longer rather than cutting them. View the full article |
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