| CATEGORY: FX |
FX round-up: Dollar dips as Dubai concerns ease |
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Tue 01 Dec 2009
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LONDON (SHARECAST) - Investors deserted the dollar and returned to higher yielding currencies as concerns over the Dubai debt siutation eased.
The dollar index, which measures the value of the US currency against a basket of currencies, fell 0.2% to 74.829, completing a miserable month for the greenback. The dollar index shed more than 2% in November.
The dollar's appeal as a haven currency was ignored as confidence returned following the announcement by the United Arab Emirates' central bank on Sunday that it would help the country’s local and foreign banks.
The central bank has introduced a special facility under which banks can access funds at a cost of 50 basis points (half a percentage point) above the three-month local benchmark interest rate.
The greenback lost ground against the euro though it recovered from its low point of $1.5083.
The European common currency was little changed after the release of European inflation data which showed consumer prices rose unexpectedly by 0.6% in November, after falling 0.1% in October.
The dollar also fell back against the Japanese yen but climbed against sterling in New York trading.
In London trading, sterling slipped to a one month low against the euro, dipping to 91.38 pence.
The UK currency took a knock after UK consumer confidence fell for the first time in nearly a year in November.
Consumer confidence declined to -17 from -13 in October, which contrasts with the continuing recovery in sentiment on the continent.
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