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Forex outlook:
The dollar gained on the Swiss franc on Thursday and approached a 4-1/2-year high
against the yen as investors continued to punish low-yielding currencies in a quest for higher returns. Against the euro, the greenback was little changed, giving up earlier gains made in the wake of the highest reading of growth on a regional U.S. economic indicator since April 2005. The dollar was up 0.2 percent at 123.70 yen after rising to 123.75 yen earlier. The euro was trapped in an unusally narrow range for the fourth straight session against the dollar, trading down slightly on the day at $1.3585 An unexpectedly large gain in Philadelphia area factory output in June provided a momentary boost to the dollar, which has closely tracked bond yields in recent weeks, but the greenback eased as U.S. Treasury yields failed to hold gains.Some analysts said fears of trouble related to subprime mortgage investments by two hedge funds managed by Bear Stearns were pushing investors out of risky assets and into short-dated Treasuries.
The day's biggest gainers were the Australian and New Zealand dollars, which have benefited as strong global economic growth has driven demand for the commodity exports of both countries, putting upward pressure on their interest rates."We're seeing the dollar gain against low yielders like the yen, but this is not really a dollar story - it's about strong global growth and demand for high-yielding commodity urrencies," said Adnan Akant, head of foreign exchange at the money manager Fischer Francis Trees & Watts. Attempts by New Zealand's central bank to intervene in the market this month have failed to limit the kiwi's gains, as investors flock to the highest interest rates in the industrialized world, of 8 percent.
Gold: The precious metal fell in New York on speculation that a pickup in the U.S. economy may keep the Federal Reserve from cutting interest rates, boosting the dollar and reducing the metals' appeal as alternative investments``Gold is a non-interest-earning instrument,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``Higher global rates are a negative for gold. It isn't attracting any alternative-asset demand.'' . in Closter, New Jersey. Gold futures for August delivery declined $5.80, or 0.9 percent, to $654.20 an ounce on the Comex division of the New York Mercantile Exchange
Crude Oil:U.S. crude oil futures slipped on Thursday, ending well below early highs near $70 as oil markets watched Nigeria's general strike and weighed expectations it could be settled and whether it will eventually affect oil exports. On the New York Mercantile Exchange, front-month August crude ended the open-outcry floor session down 26 cents or 0.38 percent at $68.60 per barrel, trading from $68.28 to $69.88.
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