Dollar rises despite lack of news
June 22, 2006
Analysts were at a loss on Thursday to figure out exactly why the US dollar rallied. While some said that the greenback was benefiting from the unwinding of carry trades by US-based hedge funds and others cited greater interest rate differentials, others discounted these explanations. Still others simply termed the rally an “aberration”.
The US currency was up 0.6 percent versus the euro to $1.2590, while it gained 0.7 percent against the Swiss franc to SFr1.2413, added 0.8 percent to $1.8305 in relation to sterling, rose 0.9 percent to C$1.1181 versus the Canadian dollar, and advanced by 1.2 percent against the Japanese yen to ¥116.15. These gains included a seven-week high versus sterling and a two-month high in relation to the yen.
The US dollar also rose even more against some emerging currencies. The greenback added 1.4 percent to $0.6109 in relation to the New Zealand dollar, while it gained 1.9 percent to TL1.692 versus the Turkish lira and it was up 2.3 percent to R7.2999 in relation to the South African rand. The gain in relation to the Turkish lira took the US dollar to a three-year high against that currency, and the gains versus the kiwi and the rand came after both nations announced current account deficits that were much higher than they had been previously.