ISM figures help push dollar rally
July 1, 2005
The US dollar was strong on Friday after the release of data from the Institute of Supply Management that showed its manufacturing index up to 53.8 in June when it had not been expected to rise above May’s figure of 51.4.
Another factor in the dollar’s strength were comments from the Federal open market committee that make it sound like the Fed will continue to raise interest rates at the current pace for the foreseeable future.
Some analysts took this to indicate that US interest rates might reach 4.25 by the end of 2005. The dollar gained 1.1 percent to $1.1958 in relation to the euro, a 13-month high. It was up 0.8 percent for the day and 2.2 percent for the week to ¥111.64 against the yen, and up 1.1 percent on the day and 2.9 percent on the week in relation to sterling, to $1.7705.
The US dollar gained 1.4 percent to C$1.2416 against the Canadian dollar. The Australian dollar lost 2.4 percent for the week to the US dollar, to $0.7516, while the New Zealand dollar lost 3.1 percent to $0.6834 in relation to the greenback.