Dollar Falls as Orders for U.S. Manufactured Goods Decline
October 26th, 2007Via: AP/IHT:
The dollar fell against a basket of six other major currencies Thursday following a report that showed orders for manufactured goods in the United States fell unexpectedly in September.
Investors sold dollars in a climate of market nervousness ahead of a Federal Reserve meeting on interest rates next week.
The dollar hit a new 33-year low against the Canadian currency. The “loonie” rose to $1.0400, or 96.15 Canadian cents per U.S. dollar, this morning after the release of Thursday’s durable goods report, according to Interbank foreign-exchange rates from Dow Jones.
The dollar climbed to 96.65 Canadian cents in late New York trading, still down from the 97.06 Canadian cents it bought Wednesday. Thursday’s low circles the bottom of the modern era of floating exchange rates, 96.04 Canadian cents, hit on May 24, 1974.
The Canadian dollar, a commodity-backed currency, first achieved modern-era one-to-one parity with the U.S. dollar on Sept. 20 and has been climbing steadily since then. Canada is a major exporter of oil, benefiting when those prices rise.
I wonder if North American books still have higher Canadian-dollar prices printed on their covers.
Doesn’t a weak dollar promote exports?
remrof Says: Doesn’t a weak dollar promote exports?
Yes, it does but many American companies have outsourced the manufacturing of their products so this weak dollar is of no benefit to them. It is still cheaper to make goods in places like China even though the American dollar has gone down in value. America imports more than it exports because of outsourcing. I don’t see that changing anytime soon unless the dollar ends up being almost worth less.