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Tuesday, September 02, 2008
Dollar Gains Strength as Gustav Weakens
Associated Press
FRANKFURT, Germany--The dollar rose against the euro Tuesday as Hurricane Gustav weakened, leaving oil production in the Gulf of Mexico largely unscathed.
The 15-nation euro bought $1.4529 in early European trading, down from $1.4618 Monday afternoon in London.
New York markets were closed Monday for the Labor Day holiday.
James Hughes, a currency analyst at CMC Markets, said that the unexpectedly light impact of the storm had helped push the price of oil below $110 a barrel for the first time since May.
There has been a lot of focus on the oil price of late with Hurricane Gustav bearing down on the south coast of the U.S., but the impact on production seems to have been limited," Hughes said.
The October contract for light sweet crude oil was trading as low as $108.92 a barrel on the NYMEX Web site Tuesday morning, a drop of more than $6 a barrel.
Hughes said the lower commodity prices lent support to the dollar. "The question remains just how much further the European currencies can depreciate in the near term," Hughes said.
The British pound also fell against the dollar to $1.7867 from $1.8019 Monday in London, while against the Japanese currency the dollar bought ¥108.28, up slightly from ¥108.10 Monday in London.
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