• Oil prices rise as U.S. dollar falls


    Oil prices rise as U.S. dollar falls
    EURO hits two-month high

    Oil prices rose yesterday after the renewed confidence in the possibility of resolving crisis of European debt to the dollar's decline against the euro in which  strengthened the procurement of a range of goods.

    The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 83.699, down from 83.868.

    The euro rose after a successful bond sales by the heavily indebted countries such as Portugal and Spain. OPEC said yesterday: the price of crudes fell to 92.95 dollars a barrel yesterday from USD $ 93.99 on Wednesday.
    Positive U.S. jobs data helped propel assets closely tied to global growth, such as the Australian dollar, which gained nearly 1.5% against the greenback. Those U.S. data built on overnight Australian jobs figures that came in stronger than economists had anticipated.
    In a hopeful sign for the labor market, the number of U.S. workers filing new claims for unemployment benefits fell last week by more than analysts expected. The Labor Department said the number of U.S. workers filing initial claims for jobless benefits declined by 21,000 to 454,000 in the week ended July 3. Economists had expected claims would fall by 12,000.
    With the ICE Dollar Index weakening, Deutsche Bank's PowerShares U.S. Dollar Index Bearish exchange-traded fund was up 0.16% from late Wednesday, while its PowerShares U.S. Dollar Index Bullish was down 0.12%. The two exchange-traded funds are based on Deutsche Bank currency futures indexes, whose composition mirrors that of the ICE's Dollar Index.

    The euro hit a two-month high against the dollar after better-than-expected economic data lent credence to a global recovery marching ahead.

    The improved investor sentiment came after positive U.S. jobs data broke a string of disappointing U.S. economic indicators, and as worries about the debt-laden euro zone continued to ease, with further details released about the stress tests on European banks.
    "Markets are starting to feel a little bit moreat ease with what's going on in Europe," helping the euro strengthen against its competitors, said Chuck Butler, president of EverBank WorldMarkets in St. Louis, which has $1.1 billion of foreign currency assets under management. "Once we're through all that, we'll have a pretty good understanding of whether the euro" is going to fall back toward the more than four-year low it hit in June of $1.1876, or whether it will extend toward $1.30, Butler said of the stress test results due in late July.

    The European Central Bank and the Bank of England both stood pat on ultra-low key interest rates. During a news conference, ECB President Jean-Claude Trichet said he welcomed the results of the European stress tests, saying the tests' transparency should build confidence in the region's financial system, which investors worried could be threatened by the euro-zone's sovereign-debt crisis.

    Late Thursday, the euro was at $1.2692, up from $1.2642 late Wednesday. The common currency hit $1.2713, its highest level since May 12, late in the New York session. The dollar was at 88.39 yen, up from 87.75 yen, while the euro was at 112.19 yen, up from 110.93 yen. The U.K. pound was at $1.5159, from $1.5191 and the dollar was at 1.0490 Swiss francs, from 1.0517 francs.

    Meanwhile, Mr. Trichet's speech after the ECB left rates unchanged offered nothing new for investors to trade on, said Roberto Mialich, foreign-exchange strategist at Unicredit MIB in Milan.

    The stress tests will look at how heavy the losses at European banks would be if European economies pitch back into recession, and in the face of a "sovereign shock" that would generate losses on banks' government bond portfolios.

    According to a statement from Committee of European Banking Supervisors released late Wednesday, the London body that groups the EU's national authorities, the tests will examine an "adverse scenario" in which European growth is three percentage points of gross domestic product slower than current EU forecasts over the next two years.

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