UPDATE: Dollar-Euro Parity, Crude Oil and the Markets

By Staff Reporters

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The Euro lost 10% versus the dollar this year and at $1.0238 EUR=EBS is close to the psychologically crucial parity point it last saw in mid-2002. It also hit new seven-year lows versus the Swiss franc and dropped against the sterling and the yen, but few observers are willing to call a bottom yet. Nomura’s analysts cut their euro/dollar target to $0.95 and said parity could be breached as soon as August. Citibank says a move to parity is “inevitable.” However, Nomura said that $0.95 was not that important historically, noting that the euro fell from $1.17 after its creation to $0.82 in October 2002. Extrapolating backwards using its legacy currencies, the euro traded as weak as $0.6444 in February 1985.

On the New York Mercantile Exchange, benchmark U.S. crude oil for August delivery fell $8.93 to $99.50 a barrel, its first dip below $100 since May 11th. Brent crude for September delivery fell $10.73 to $102.70 a barrel.

Finally, the Dow dropped 129.44 points, or 0.4%, to finish at 30,967.82; it had been down more than 700 points at its lows earlier in the session. The S&P 500 gained 6.06 points, or 0.2%, closing at 3,831.39. And, the NASDAQ Composite advanced 194.39 points, or 1.8%, to finish at 11,322.24.

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