Dollar strengthens against euro, pound

AP
Dollar strengthens against euro, pound
Wednesday August 20, 4:51 pm ET
Dollar recovers against euro, pound after 2-day decline


NEW YORK (AP) -- With oil prices seesawing, the dollar bounced back against the euro and the pound Wednesday after a two-day drop.

The 15-nation euro slipped to $1.4741 in late New York trading from $1.4768 Tuesday, while the British pound fell to $1.8615 from $1.8660.

The U.S. Energy Department said Wednesday a big gain in imports drove crude inventories up by a hefty 9.4 million barrels in the week ended Aug. 15, a figure much higher than analysts expected.

Light, sweet crude for September delivery rose near $115 a barrel on the New York Mercantile Exchange. Earlier in the session, it climbed as high as $117.03 before the inventory data was released, then fell as low as $112.61, only to rebound again.

Investing in oil futures has been a hedge against a sliding dollar, but oil's weekslong drop has helped support the dollar. The prices of the two have tended to move in opposite directions.

Meanwhile, shares of mortgage giants Fannie Mae and Freddie Mac continued to sink Wednesday on worries that the government-chartered companies will need a bailout from the Treasury Department, a move that could wipe out shareholders' equity.

The dollar dropped earlier in the week as crude futures surged, the financial sector worried Wall Street and the U.S. government said wholesale prices jumped higher in July.

"After the big push higher by the dollar in the first half of the month, there's perhaps a temptation to overanalyze data looking for any suggestion that will relate to dollar weakness -- or indeed strength in other currencies," said James Hughes, a currency analyst with CMC Markets.

In other New York trading, the dollar slipped to 1.0626 Canadian dollars from 1.0630 Canadian dollars, but rose to 1.0995 Swiss francs from 1.0927 francs. The dollar weakened to 109.79 Japanese yen from 109.82 yen.