Heading to Europe for a business trip in a few days. Thankfully, most of it will be on an expense account:
The 13-nation euro hit a fresh record against the dollar — rising to $1.4729 — before falling back. The dollar lost ground following word that a senior Chinese political figure said China should spread its $1.43 trillion foreign exchange reserves beyond the dollar into the euro and other strong currencies.
The euro’s rally put it well above the $1.4554 the currency bought late Tuesday in New York. The previous record high, also set Tuesday, was $1.4571.
The weak dollar helped keep pressure on the price of oil during much of the session. Light, sweet crude fell 33 cents to settle at $96.37 per barrel on the New York Mercantile Exchange after the goverment reported inventories fell less than expected last week while refinery utilization remained flat.
December gold rose but also came off its highs, adding $10.10 to settle at $833.50 an ounce on the Nymex.
Comments from Federal Reserve officials didn’t give investors much reason to reconsider their bets. St. Louis Fed President William Poole said recent weeks have seen the credit markets make clear progress in returning to normal but said the Fed might have to make other rate cuts. Such a move would likely hasten the dollar’s fall as investors would seek better interest rates elsewhere. The central bank reduced the federal funds rate in September and again last month.
You know, one of the first things I learned in Dr. Billings’ macro-econ class is that a lower interest rate = a lower dollar. Pity that Mr. Ben can’t quite remember this lesson as he tries to bail out his Wall Street pals.