Business

Dollar Sinks on Asia Recovery Signs
By wchung | 08 Jun, 2026

The dollar fell steeply to multimonth lows Friday as strong economic reports from Japan and India sparked hope in a global economic recovery.

Equities in Europe and Asia turned higher, with heavy buying in emerging markets. The dollar has tended to trade inversely with stocks as falling markets prompted a safety play for cash. When stocks rise across the board, the dollar tends to suffer as investors trade in their greenbacks for foreign equities and bonds.

The 16-nation euro hit a 5-month high of $1.4126 from $1.3962 late Thursday, while the British pound jumped to its highest point in 6 months at $1.6177 from $1.5953.

The dollar fell to 95.80 Japanese yen from 96.91 and tumbled to a 4-month low of 1.0707 Swiss francs from 1.0834 late Thursday.

On Friday, Japan said industrial output rose 5.2 percent in April — evidence that manufacturers in the world’s No. 2 economy are starting to recover from steep production cuts amid a big drop in worldwide demand for the country’s exporters.

Also on Friday, India, Asia’s third-largest economy, said it grew 5.8 percent in the first quarter of 2009 from the same time a year ago. That pace was on par with economic growth in the preceding quarter and much better than economists had expected.

Hope of an economic recovery and a drop in U.S. oil inventories pushed oil prices to a six-month high above $65 a barrel. Investors are betting that increased demand for goods will jump-start a demand for oil. They also often buy crude as a hedge against a dropping dollar. Gold, another commodity, is also used as a hedge against inflation, and gold prices have risen precipitously in recent weeks, settling at a 3-month high above $963 an ounce in New York on Thursday.

The rising cost of commodities is lifting currencies of major commodity exporters, such as Canada, Mexico and Australia as well.

The dollar sank to a 7-month low of 1.0991 Canadian dollars from 1.1137 late Thursday and slid to 13.0270 Mexican pesos from 13.2395.

The Australian and New Zealand dollars also both gained more than 1 percent against the greenback in early morning trading in New York.

5/29/2009 7:47 AM NEW YORK (AP)