Dollar stages modest rebound
Afp, London
The dollar rose on Tuesday against the euro and the yen before a further batch of US economic numbers, and as dealers digested recent heavy losses to crude oil prices. However, gains were limited following recent weaker-than-expected US third quarter growth figures. The European single currency fell to 1.2690 dollars in European trading, from 1.2724 dollars in New York late Monday. The dollar climbed to 117.76 yen from 117.46 yen late on Monday. Dealers were awaiting for publication of the Chicago purchasing managers' index for October later on Tuesday, as well as a fresh reading on US consumer confidence. "The correction (lower) in the oil price is, in our view, the principal factor imparting a firmer dollar tone (on Tuesday), although the weakness in German retail sales... is notable," HBOS analyst Steve Pearson said. The dollar tends to firm as oil prices fall because many participants divert cash away from the oil market, dealers said. Early on Tuesday the oil price retreated beneath 58 dollars per barrel. Meanwhile, data showed Tuesday that German retail sales fell in September, confounding analysts' expectations of a 0.6-percent increase ahead of the planned rise in value-added or sales tax (VAT) at the beginning of 2007.
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