21 July 2009, 18:05  Dollar slides

Markets already were relieved that second-quarter results from many major American companies have turned out better than expected. Reports this week from American Express, Boeing, and Caterpillar, among others, will likely to provide more clues about any rebound in the world's largest economy. Gains in equity markets have helped weaken demand for the dollar lately as investors exit the traditional haven of the U.S. currency. "Stock market exuberance over better-than-expected corporate earnings has erased interest in the safe-haven greenback," Michael Woolfolk, senior currency strategist at Bank of New York, wrote in a client note. Investors will be watching closely as Federal Reserve Chairman Ben Bernanke gives his semiannual report on monetary policy to the House Financial Services Committee Tuesday. "Zero interest rate policy in the U.S. has led to further (dollar) selling, with the greenback an attractive funding currency now for the carry trade," Woolfolk said. "Questions remain over the timing of the withdrawal of quantitative easing measures."

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