Dollar mixed as euro rises on tightening speculation

08:22, January 25, 2011      

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The U.S. dollar traded mixed against major currencies in late New York trading on Monday as the euro rose on the speculation of tightening in the euro zone.

The high inflation in euro zone raised concern of tightening monetary policy, investors speculated the euro zone might raise interest rate ahead of the Federal Reserve, which meant the euro would be favored in the market, comparing to the dollar.

The euro climbed to near a two-month high level of 1.37 against the dollar in the midday trading session on Monday.

The recent trend of the euro has already reflected the changing mood among investors in the market: the euro has rallied about 6 percent in the past two weeks.

Also, the euro's broad rally has cleared out short positions, or bets that the currency would depreciate. The latest Commodity Futures Trading Commission data show that euro positions held by speculators shifted to 4,109 net long contracts last week, versus 45,182 net shorts the previous week.

The dollar index, which measures its performance against six currencies, fell to 78.026 on Monday, from 78.114 in late Friday.

In late Monday trading, the dollar bought 82.49 Japanese yen, comparing with 82.60 late Friday, and the euro rose to 1.3638 dollars from 1.3602.

The British pound fell to 1.5995 dollars from 1.6002. The dollar fell from 0.9590 to 0.9496 against Swiss francs, but rose to 0.9949 Canadian dollars from 0.9948.

Source: Xinhua
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