re: sbm in todays bulletin
Gold about to go into orbit :)
Check out this!
Dollar Falls on Concern the U.S. Will Pursue a Weaker Currency
May 30 (Bloomberg) -- The dollar fell the most in six weeks versus the euro on speculation the Bush administration won't abandon a push for a weaker currency after it nominated Goldman Sachs Group Inc.'s Henry Paulson as Treasury secretary.
The U.S. currency has fallen about 4 percent against the euro and yen since April 21 when the Group of Seven industrialized nations urged China and other developing Asian nations to let their currencies strengthen. The dollar came within a cent of a one-year low versus the euro today after a report showed consumer confidence fell in May.
``U.S. policy is kind of locked into what was agreed in the last G-7 statement and that policy is yes, we want to engineer a weaker dollar, particularly against the Asian currencies,'' said Greg Anderson, a currency strategist with ABN Amro NV in Chicago.
The dollar weakened to $1.2867 per euro at 12:03 p.m. in New York, from $1.2751 yesterday, the biggest drop since April 17. 23. It reached a one-year low of $1.2972 on May 15. The currency dropped to 112.14 yen from 112.46 yen. It set an eight-month low of 109 yen on May 17.
The Bush administration has pressured China to let its currency appreciate, spurring gains in other Asian currencies against the dollar. The G-7, which called on China and developing Asian nations to rely less on exports for economic growth, consists of the U.S., Japan, Germany, the U.K., France, Italy and Canada.
`Toe Their Line'
China abandoned a decade-old peg to the dollar in July, and has since let the yuan advance about 1 percent to 8.03 per dollar. The euro rose 6 percent in the same period. A weaker dollar may help the U.S. economy by making its exports cheaper.
``The Bush administration will want someone to toe their line,'' said Gavin Friend, a currency strategist at Commerzbank AG in London. ``Somebody from Wall Street might be good in terms of credibility, but he's not likely to be able to deviate from the current line.''
Paulson, Goldman's chief executive officer, will replace John Snow, who took the post in February 2003. The appointment is subject to Senate confirmation. The dollar has fallen about 21 percent against the euro since Bush took office in January 2001, even as the administration has said it supports a ``strong dollar.''
New Initiative
The dollar's decline began in Asia after Gerard Baker, a columnist for the London-based Times wrote that Donald Evans, Bush's former commerce secretary, may succeed Snow. The currency briefly trimmed some losses after new reports that it would be Paulson instead of Evans.
``There's always a sort of fear of new initiatives being taken by the administration when there's a change,'' said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut.
The U.S. currency weakened against the euro and yen for three years through 2004, rallying last year as the Federal Reserve boosted interest rates. It has resumed its decline this year on speculation signs of slowing growth will deter the Fed from adding to 16 straight interest-rate increases to 5 percent from 1 percent.
Futures traders added to bets the European Central Bank will lift rates three more times this year after a report showed money supply in the 12 euro nations increased the most in almost three years in April.
European Rates
The ECB has lifted its benchmark rate twice since the start of December, to 2.5 percent. The yield on the three-month Euribor contract due December 2006 rose 4 basis points to 3.44 percent today, the highest since May 17. A basis point is 0.01 percentage point.
The contracts, which are traded electronically on the London International Financial Futures Exchange, settle to the three- month euro interbank offered rate, which has averaged 16 basis points over the ECB rate since 1999.
Consumer confidence in the U.S. fell in May by the most since Hurricane Katrina battered the Gulf Coast last year and sent energy prices soaring, a report from a private research group showed.
The Conference Board's confidence index fell to 103.2 from a four-year high of 109.8 in April, the New York-based firm said.
Ten-year U.S. Treasuries yield 114 basis points more than similar-maturity German government debt, down from 119 basis points last week, which was the highest since October.
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