Dollar Still Stronger
MARKETSCOPE : The dollar strengthened Thursday, after Federal Reserve Chairman Alan Greenspan said the U.S. economy has good momentum.
One dollar bought 117.27 yen, from 116.85 yen at Wednesday's close. While Greenspan said the U.S. economy has good momentum, he also cautioned that the prospects for keeping inflation under control were more problematic.
"Structural productivity continues to grow at a firm pace, and rebuilding activity following the hurricanes should boost real GDP growth for a while," Greenspan told the congressional Joint Economic Committee Thursday. "More uncertainty, however, surrounds the outlook for inflation." He also warned that the United States needs to boost its supplies of natural gas, though he said they seemed adequate for the moment.
News hit earlier that third quarter productivity growth was a higher-than-expected 4.1%. Unit labor costs fell by 0.5%, while initial jobless claims dropped by 8,000 to 323,000. U.S. Factory Orders fell a more-than-expected 1.7% in September after rising 2.9% in August. The October Institute for Supply Management Non Manufacturing Business Index rose to a higher than expected 60.0 level in October, from 53.3 in September.
The euro slipped to 1.1942 from 1.2071 at the previous close, after news that the European Central Bank left interest rates unchanged earlier Thursday. The sterling moved to 1.7712 from 1.7773, following news of stronger than expected U.K. services purchasing manager index data.
Japanese markets were closed for Culture Day holiday.