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Soaring euro will hurt holiday travelers

February 16, 2011

By Staff Reporter

Irish people planning on returning home for Christmas and the New Year will find their dollars stretched thin against the bullish 4-year-old single European currency.
“In the absence of anything new or fresh hitting the market . . . the dollar keeps sliding. The market is more and more of the view that a weaker dollar suits the U.S. economy and that a global economic recovery depends on the dollar being allowed to slide,” said Thomas Molloy, a trader with Bank Leumi in New York.
And analysts said that continuing U.S. economic imbalances such as the wide U.S. current account deficit, worked against evidence of a strong U.S. recovery.
“The trend of late has been to completely ignore any good numbers out of the United States, so I don’t know that it is necessarily important what the numbers are: they just seem to generate volatility and dollar selling,” said John Beerling, regional foreign exchange trading desk manager for Wells Fargo in Minneapolis.
News of a sharp fall in U.S. job cuts also failed to improve the dollar’s fate.
And last week, when fumes overcame six subway workers in New York, the markets dipped briefly, indicating continuing worries over terrorism and security.
This week it was a plane crash: an aircraft crashed in Long Island and the dollar slipped some more before traders learned that the incident involved only a small airplane.
For travelers heading to Northern Ireland, there is also scant comfort — sterling is also strong against the dollar, up 0.6 percent to a high of $1.7281.

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