The dollar fell against the other major currencies Friday, September 14, as concern for the US economy mounted in the wake of Tuesday's assault by terrorists. The dollar's decline allowed the euro to rise to $0.9215 at 2100 GMT from $0.9120 a day earlier. The dollar also fell sharply against the Japanese currency to 117.18 yen from 118.78 yen on Thursday.
Royal Bank of Scotland economist Neil Parker said that weak US consumer confidence figures, which were published on Thursday and registered prior to the attacks, weighed on the dollar. Referring to the consumer confidence survey, he said: "That was taken before the attack on the US and it just dropped like a stone and I think that is what created a lot of this selling pressure on the US dollar."
The University of Michigan's preliminary consumer confidence survey showed on Thursday a sharp fall to a weaker-than-expected 83.6 points in September from 91.5 in August. Until recently, consumer spending had underpinned the US economy, keeping it from slipping into recession. Many analysts have now become concerned that the US economy could slip into recession with consumer confidence destroyed by the recent attacks.
However, some analysts said that the dollar's weakness on Friday was due to certain dealers breaking an unspoken "gentleman's agreement" and selling the US unit on fears about the financial impact of the devastating attack on New York.
"This is without doubt a speculative movement that breaks the gentleman's agreement," economist at the 4CAST consultancy, Chris Furness, said. Parker said: "I wouldn't call that the end of the gentleman's agreement. Volumes are still extremely thin."
Official figures released on Friday showed that US retail sales rose 0.3 percent in August but industrial production fell for the 11th straight month. Retail sales rose 0.3 percent in August from the previous month, the Commerce Department said, the strongest rise since April and a sign that consumers were still the strongest pillar supporting the US economy.
In late New York trade, the dollar stood at 1.6214 Swiss francs from 1.6475 a day earlier. The pound was being traded at $1.4715 from 1.4711 on Thursday. ― (AFP, New York)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
