Dollar rally strengthens against euro
May 20, 2005
A continuing string of recent negative economic news in recent weeks, it was expected by some that the US dollar would end its recent rally.
After a stall in the middle of the week, however, the dollar on Friday reached its highest level against the euro since the beginning of the year. It also hit a one-month high in relation to the yen.
Some of the news that was expected to send the dollar on a downward trend against other currencies included figures showing that core consumer prices were unchanged in April, even though a 0.2 percent rise had been expected.
Additionally, industrial production figures were down 0.2 percent in April. Some rationalized that most of that decline came from the automotive sector, which served to neutralize its effect.
Then, most recently, data released on Monday by the US Treasury department showed that net portfolio inflows into the US fell to $45.7 billion in March, down from $81.4 billion in February and the lowest since October 2003.
By the middle of the afternoon on Friday in New York, the dollar had risen 0.5 percent for the week in relation to the euro, to $1.2550, and it gained 0.8 percent against the yen to stand at ¥108.10. The dollar also rose in relation to sterling, where it gained 1.3 percent to $1.8260.