Dollar Gains as Euro, Pound Weaken on Recession

[barbara]

Hi guys, how are you doing. The dollar and yen rose as traders fled the euro and pound on evidence Europe’s recession is deepening.

The 16-nation currency fell the most against the dollar in almost three months as industrial orders in the region plunged in January, adding to bets the European Central Bank will need to consider buying bonds to promote growth. The pound dropped to a one-week low as the U.K.’s economy contracted in the fourth quarter more than economists forecast.

The euro decreased as much as 2 percent to $1.3264, the biggest intraday drop since Jan. 9, before trading at $1.3298 at 12:42 p.m. in New York. Europe’s currency extended its decline this week to 2.1 percent. The yen gained 2.2 percent to 130.56 per euro from 133.52. The dollar weakened 0.6 percent to 98.13 yen from 98.71.

The pound fell for a third day versus the dollar after a report showed Britain’s gross domestic product contracted in the fourth quarter by a greater-than-forecast 1.6 percent, the most since Margaret Thatcher was prime minister in the 1980s.

Cheers!

Barbara ;)