NEW YORK (AFP) - The dollar jumped to a two-month high against the euro on news that net capital inflows into the United States rose sharply in November and amid increasing speculation about higher US interest rates.

The single European currency in late-day trade was at 1.3022 dollars, down from 1.3077 on Monday in London. New York markets were closed Monday for the Martin Luther King holiday.

The euro at one point fell below 1.30 dollars for the first time since November at 1.2995.

The dollar meanwhile climbed to 102.39 yen against 102 yen on Monday.

The US Treasury reported that total net capital inflows rose to 81 billion dollars in November from 48.3 billion in October. Foreign purchases of domestic securities increased to 99.7 billion dollars in November from 65.4 billion.

Foreign central banks also increased their purchases, buying 27.9 billion dollars of US assets, including 21 billion of Treasury securities, 3.5 billion of agency bonds, 1.9 billion of corporate bonds and 1.5 billion in equities.

"There had always been fears that the inflows won't be enough to cover the trade deficit, so the outcome proved supportive," said Gary Noone at Informa Global Markets.

There have been concerns in global financial circles that overseas investors, unnerved by the twin US current account and budget deficits, would one day abandon US securities.

The greenback's gains were bolstered by ongoing expectations based on strong economic news, that the Federal Reserve (news - web sites) will further raise interest rates, which could help lure foreign money to US markets.

"The market has bid the greenback higher recently on the prospect of a potentially more-aggressive pace of monetary policy tightening from the Fed," said Alex Beuzelin, a senior market analyst with Ruesch International in Washington.

The overriding theme in a round of speeches from Fed officials on Tuesday backs expectations for continued, if still "measured," interest-rate increases, currency traders said.

Philadelphia Fed President Anthony Santomero, a voting member of the rate-setting Federal Open Market Committee (news - web sites) this year, predicted a "sustained expansion" in a speech he delivered Tuesday morning.

In late New York trade, the dollar stood at 1.1850 Swiss francs from 1.1817 Swiss francs Monday.

The pound was quoted at 1.8650 dollars after 1.8607 Monday.

Source: Business AP.

NEW YORK (AFP) - The dollar jumped to a two-month high against the euro on news that net capital inflows into the United States rose sharply in November and amid increasing speculation about higher US interest rates.

The single European currency in late-day trade was at 1.3022 dollars, down from 1.3077 on Monday in London. New York markets were closed Monday for the Martin Luther King holiday.

The euro at one point fell below 1.30 dollars for the first time since November at 1.2995.



just imagine.. it has to do that 30 more times to get back to where it was four years ago.

And all this foreign ownership of U.S. resources is a good thing?  Set against the trade deficit it may be - in the short term.  In the long term it threatens our economic independance, as does the continuing erosion of our industrial sector.  Both tend to make us increasingly dependant on the whims, or worse, the malevolance of those oil-rich autocrates (as in Saudi Arabia) with whom Lil' Georgie is in bed (and not "playing the dominant role" if you catch my drift).

The dollar is in tough shape, there isn't a whole lot to be happy about.  The best that the propoganda
machine can come up with is how great it will be for foreigners to be able to take advantage of the
weak dollar buy buying American products and visiting here, while Americans are looking for
even cheaper bargains and planning on day trip vacations.  ??? 

just imagine.. it has to do that 30 more times to get back to where it was four years ago.


Zing!  :)

The dollar is in tough shape, there isn't a whole lot to be happy about.  The best that the propoganda
machine can come up with is how great it will be for foreigners to be able to take advantage of the
weak dollar buy buying American products and visiting here, while Americans are looking for
even cheaper bargains and planning on day trip vacations.  ??? 


I think its great that foreigners visit us and buy our stuff.  The problem is that they buy our mines, forests, factories... and render us increasingly similar to the third world "countries" US based (not "our" they own the US no loyalty, as their CEO's will sometimes tell us) corporations own.