RTRS: Dollar gains on cooling risk appetite, weak stocks
By Jessica Mortimer
LONDON (Reuters) - The dollar rose broadly on Thursday, recovering from 14-month lows versus the euro and a currency basket as weaker corporate earnings and falls in equity and commodity markets dampened investor appetite for risk.
Commodity-linked currencies such as the Australian, Canadian and New Zealand dollars fell, coming off recent multi-month highs versus the U.S. dollar as European shares .FTEU3 and oil prices lost more than 1 percent.
Disppointing earnings from eBay Inc (EBAY.O) on Wednesday were compounded on Thursday by below-forecast results from Ericsson (ERICb.ST), cooling some of the recent optimism about prospects for a global economic recovery.
"Dollar strength fits with lower risk appetite and falling stock markets," said Johan Javeus, SEB currency strategist in Stockholm.
"Currencies like the Australian and New Zealand dollars have had a good run over the last few weeks and this is a good opportunity to take some profit," he added.
Earlier, the U.S. dollar had also benefited from Chinese growth data. Although growth accelerated the numbers disappointed some in the market who had expected even stronger expansion, prompting selling in higher-yielding currencies.
But the dollar stayed not far from multi-month lows, with the euro just below the $1.50 level it scaled on Wednesday, and analysts expect its downtrend to resume on the view that U.S. interest rates will stay low while the global economy improves.
By 1146 GMT (7:46 a.m. EDT), the dollar had gained 0.4 percent against a basket of currencies to 75.258 .DXY, pulling back from a 14-month low of 74.940 touched the previous day.
The euro was down 0.1 percent on the day at $1.4997, though it was still within sight of $1.5047 hit on Wednesday, its strongest since August 2008.
"The euro's proximity to $1.50 suggests that the market is not taking the current correction as too serious," said Michael Klawitter, senior currency strategist at Commerzbank in Frankfurt.
Among riskier currencies, the Australian dollar fell 0.4 percent to $0.9229, the New Zealand dollar lost 0.5 percent to $0.7549 while the U.S. dollar gained 0.6 percent against its Canadian counterpart to C$1.0490.
Sterling also fell against the dollar and the euro, stalling a dramatic rally in the past nine days, after UK retail sales showed no growth in September, confounding expectations for a rise.
RIKSBANK HOLDS RATES
The Swedish crown lost ground after the country's central bank held interest rates at a record low 0.25 percent and forecast they would stay near zero for another year
The decision was broadly expected, but analysts said there was some surprise at its move to pump another 100 billion Swedish crowns ($14.5 billion) into banks with 11-month fixed-rate loans.