Jitters over American recovery hit dollar

Click to follow
The Independent Online

The dollar suffered another fall on the foreign exchange markets yesterday after a key gauge of the US economy fell for the first time since September's terrorist attacks.

The dollar suffered another fall on the foreign exchange markets yesterday after a key gauge of the US economy fell for the first time since September's terrorist attacks.

Falling stock prices and weaker consumer confidence dragged down the leading indicator index produced by the independent Conference Board. The US currency slid to a seven-month low against the euro, breaking through the 92 US cents barrier. The Conference Board index is seen as a pointer to the future performance of the economy and the fall will add to fears that the US recovery is still fragile.

Ken Goldstein, the board's chief economist, said: "The signal ... is that the recovery is developing quite slowly. Only consumption is fuelling the recovery. The real problem is that neither investment nor exports can offset any weakening in consumer demand."

The index, which fell 0.4 per cent in May, is made up of 10 components of which five - money supply, stock prices, consumer expectations, jobless benefit claims and interest rates – were negative.

Wall Street was also under pressure as stocks slumped on the back of the economic news and stark warnings of fresh terrorist attacks. The Dow Jones tumbled as low as 132 points, wiping out part of last week's 4.2 per cent gain.

Comments