Dollar slips as optimism recession is ending

Headline - Currencies

Written by Faisal Justin

Jakarta, Financeroll.com - The dollar extended declines against the higher-yielding currencies of Australia and South Korea as speculation the global recession is ending reduced demand for the greenback as a refuge. The U.S. dollar weakened against 14 of the 16 most-traded currencies after Goldman Sachs Group Inc. recommended clients buy euros versus the dollar, citing a recovery in world growth expectations. Aussie and kiwi rose for a second day against the U.S. currency after crude oil reached a seven-month high and Asian equities gained. The Swedish krona climbed against the dollar and the euro on speculation plans to cut state spending in Latvia will trigger an international bailout, easing concerns that Swedish banks would face losses. When optimism about the global economy is out there, people feel less need to hold the dollars which they have accumulated for a rainy day. The dollar is likely to remain under pressure. Aussie rose 0.3 percent to 80.42 U.S. cents in Tokyo. Kiwi traded at 62.92 U.S. cents and 61.24 yen from 62.71 cents and 61.08 yen. The U.S. currency traded at $1.4073 against the euro from $1.4065 yesterday in New York. The yen was at 136.95 against the euro from 136.98 yesterday. The dollar bought 97.31 yen from 97.38. The Korean won climbed 0.9 percent, the most in a week, to 1,254.10 per dollar as overseas investors added to their holdings of the nation’s shares for a fourth straight day. The krona rose 0.1 percent to 10.7945 per euro and strengthened 0.1 percent to 7.6744 against the dollar.