[NYTr] Booming Economy: Euro shoots higher still against US dollar

[All the News That Doesn't Fit]

AFP - Oct 15, 2007
http://www.afp.com/english/news/stories/071015103148.r1duhob4.html

Euro shoots higher against US dollar

LONDON (AFP) - The European single currency rallied against the dollar
on Monday, as dealers eyed upcoming US corporate results and a meeting
of top world finance chiefs.

The euro climbed to 1.4230 dollars, from 1.4176 in New York late on
Friday.

The dollar gained to 117.67 yen, from 117.61 late Friday.

Traders are looking ahead to Friday's meeting of finance ministers from
the Group of Seven (G7) industrialised nations, followed by the annual
gatherings of the International Monetary Fund and World Bank over the
weekend.

The focus of the meetings is expected to be the impact of US housing
and credit woes and exchange rate tensions over the strength of the
euro.

"This G7 meeting will be the first in some time where forex will be at
the top of the agenda, and we think that this is due to building
downside risks to growth in the G7 economies," noted Barclays Capital
analysts.

"We think that participants from Europe will likely openly request a
correction of the recent euro appreciation... which may see some forex
market reaction and push up the yen," they said.

Dealers said they were also closely monitoring the Chinese Communist
Party's 17th Congress which opened Monday.

Chinese President Hu Jintao said in a speech that the Chinese yuan
currency will "gradually" be made fully convertible, but provided no
timetable for the move.

China regularly comes under fire from major trade partners for
artificially keeping down the value of its currency in order to make
its exports cheaper on international markets.

Kosuke Hanao, forex sales manager for HSBC, said market players were
also cautious about the outlook for US corporate earnings with a slew
of financial results due this week from the likes of Intel, Yahoo,
Google and Citigroup.

The reports are likely to affect market expectations on whether the US
Federal Reserve will cut US interest rates again later this month, a
move that would likely weaken the dollar, he said.

The Fed cut borrowing costs by half a percentage point to 4.75 percent
on September 18.

Commerzbank analyst Gavin Friend said the mood for the dollar remained
downbeat.

"Sentiment on the dollar remains extremely negative with decent US data
unable to offer the dollar any relief."

He added: "Clearly the scene is set for an extension of dollar weakness
and we retain our medium to long-term negative outlook."

In early European trade on Monday, the euro changed hands at 1.4230
dollars, against 1.4176 dollars late on Friday, 166.40 yen (166.72),
0.6982 pounds (0.6962) and 1.6781 Swiss francs (1.6790).

The dollar stood at 117.67 yen (117.61) and 1.1793 Swiss francs
(1.1845).

The pound was being traded at 2.0373 dollars (2.0356).

In London, the price of gold rose to 755 dollars per ounce at the
morning fixing from 749.50 dollars late on Friday.