MW: Dollar gains as Geithner says borrowing less than thought
By William L. Watts & Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- The dollar held the line on gains against major counterparts Thursday, after U.S. Treasury Secretary Timothy Geithner said the government's borrowing needs would be substantially less than expected.
"We are likely to have to borrow substantially less than we initially anticipated to help repair the damage to our financial system," Geithner told CNBC in Singapore.
Other dollar-supportive comments came ahead of the meeting of Asia-Pacific Economic Cooperation group, according to Brown Brothers Harriman.
The U.S. currency stayed higher after the Labor Department reported a bigger-than-expected drop in jobless claims in the latest week.
The dollar index (DXY 75.53, +0.37, +0.49%) , which measures the U.S. unit against a basket of six major currencies, stood at 75.562, up from 75.401 ahead of the claims report and up 0.5% on the day.
The government said first-time jobless claims fell by 12,000 to a total of 502,000 in the week ended Nov. 7. Economists surveyed by MarketWatch expected initial claims to drop to about 510,000. See report on lower U.S. claims for unemployment benefits.
Meanwhile Overall action in currency markets remains largely driven by technical considerations amid a lack of major economic data to drive foreign-exchange trading, said strategists at UniCredit MIB in Milan.
The inability of the Dow Jones Industrial Average to break through resistance at the 10,300 level has provided the dollar with some modest relief, they said, but they cautioned that a "much weaker Dow" would be needed for there to be a significant dollar rebound.
DXY 75.53, +0.37, +0.49%
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Risk appetite continues to call the tune for the U.S. dollar, following a pattern with the greenback weakening when investors are willing to pile into equities, commodities and higher-yielding currencies. Conversely, the dollar has seen a respite from selling pressure when those markets weaken.
The dollar had seen some pressure in Asian trading as gold prices continued to press higher in electronic trading on Globex. December gold futures notched a new high at more than $1,122 an ounce.
The catalyst for the rally has been that demand for the precious metal would remain strong against expectations for low interest rates. The December contract traded at $1,116.10 an ounce in recent action, a gain of $1.50. See Metals Stocks for more on gold.
The euro (CUR_EURUSD 1.49, -0.01, -0.77%) traded at $1.4877, down from $1.4979 in North American trade late Wednesday. The British pound changed hands at $1.6551, little changed from $1.6557.
'Global context'
"The global context and the performance of the equity markets will continue to guide the price action the currency markets," including moves by the euro against the dollar, wrote currency strategists at KBC Bank in Brussels.
