07/03 00:35
By Mari Murayama
Tokyo, July 3 (Bloomberg) -- The dollar rose, putting it on track for its biggest two-day gain against the euro in seven weeks, on expectations reports today and tomorrow will show factory orders are rising in the U.S. while falling in Germany.
The U.S. currency strengthened to 98.35 cents per euro from 98.65 in late New York trading yesterday, when it gained 0.5 percent. The dollar traded at 120.06 yen from 119.85 after rallying as high as 120.21.
U.S. factory orders probably rose for a third month in May, climbing 0.5 percent, a Bloomberg News survey of economists shows. A report Monday showed manufacturing grew in June at the fastest pace in almost 2 1/2 years. In Germany, Europe's largest economy, a report tomorrow will probably show factory orders dropped 0.2 percent in May, a survey showed.
``We're seeing many strong reports for the U.S. and weak ones for Europe,'' said Minoru Shioiri, foreign exchange manager at Kokusai Securities Co. ``More signs of the difference between the two regions may convince us'' to buy dollars, he said.
The dollar pared some of its gains as the decline in U.S. stocks to a 4 1/2-year low yesterday heightened concern more money will flow out of the nation's assets.
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Plus isn't a falling dollar good for exporting American made goods?
That is the accepted wisdom.
Bear in mind, though, that the dollar began to fall wrt European currencies very soon after Reagan's Treas. Sec. Baker announced (in Germany?) the dollar would not be defended.
That was late September, 1987.
You recall what happened in October.