The dollar took a beating here Friday, punished by weaker-than-expected growth figures in the US that triggered a fresh spurt in the euro. \nThe single currency was trading at US$1.2458 after US$1.2405 in New York late on Thursday. \nAgainst the yen the dollar in late-day deals was at ¥105.78 after ¥105.95 on Thursday. \nAnnualized US economic growth slowed in the fourth quarter of last year to 4 percent from the previous quarter's 8.2 percent. While the result remains above trend, it was short of expectations of a 4.9 percent gain. \n"The dollar had largely built in a strong outcome for GDP today and for this reason it is likely to sell off on the back of the data, while bonds will benefit," said Mitul Kotecha, currency strategist at Credit Agricole Indosuez. \nThe market had focused hard on the GDP data in light of Wednesday's relatively hawkish statement from the Federal Open Market Committee, which appeared to point to prospects for US interest rate hikes and pushed the dollar sharply higher. \nAfter the GDP-inspired dollar sell-off, the Chicago Purchasing Managers Index helped cage dollar bears. \nThe Chicago PMI index rose for a ninth straight month to 65.9 percent in January, the highest since July 1994 and above expectations of 61.4 percent. \nThe dollar's medium-term fortunes will depend heavily on the outcome of next weekend's meeting in Florida of finance ministers from Britain, Canada, France, Germany, Italy, Japan and the US, analysts said. \nBut many economists doubt the G7 session will reverse the downward course of the dollar. \nAny strategy to shift the burden of the dollar's adjustment more toward Asian currencies was unlikely to be agreed upon, they said, given resistance from US Treasury Secretary John Snow. \n"The United States will stress the importance of improving underlying fundamentals, which will not only provide currencies with an appropriate guide in the longer term, but will also serve their individual economies as well as global growth," predicted Hans Redeker, head of global FX strategy. \nThe euro was changing hands at US$1.2458 from US$1.2404 late on Thursday in New York, ¥131.72 (¥131.42), £0.6836 (£0.6829) and 1.5677 Swiss francs (Sf1.5625). \nThe dollar stood at ¥105.78 (¥105.95) and 1.2590 Swiss francs (Sf1.2596). \nThe pound was at US$1.8215 (US$1.8164), ¥192.72 (¥192.44) and 2.2927 Swiss francs (Sf2.2880). \nOn the London Bullion Market, the price of an ounce of gold stood at US$399.75 against US$405.70 late on Thursday.
From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc’s bankruptcy protection filing on Friday last week was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by COVID-19 travel restrictions. The company’s monthly revenue last month fell 73 percent year-on-year, a shortfall that even the most resilient
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