THE DOLLAR posted its largest daily gain in almost two months against the euro yesterday, after traders said the greenback’s slump earlier this week may have been overdone.
The dollar gained ground after the US government said it will provide loans to Detroit carmakers crippled by the economic downturn. The Bank of Japan’s interest rate cut to nearly zero also lent support to the greenback.
The euro also lost ground after the European Central Bank said on Thursday it would reduce the return it offers to those banks that hold cash with it.
The euro also lost ground against sterling, with the British currency strengthening to less than 93 pence per €1, snapping a three-day decline. The pound appreciated to 92.96p before weakening again to finish on 93.38p compared to 94.73p on Thursday.
Despite yesterday’s pullback, the euro is on track to post a weekly gain of nearly 4 per cent against the dollar. – (Reuters/Bloomberg)
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