Why are so many companies taking a $10 billion buyout offer?
The dollar has appreciated sharply over the past year, to an average of about 90 cents against the euro, and a rally is likely in store for the dollar.
In early March, the S&P 500 rose 0.6% to 1,099.55.
The euro has strengthened against the dollar, while the greenback has shed 0.5% to $1.2694.
The dollar’s rally was triggered by the government of China’s announcement of its intention to open a new $100 billion sovereign bond-buying program.
That could raise the value of the dollar in the world’s biggest economy, as Beijing continues to push the yuan down to near parity with the dollar and its currency.
“The dollar is already at a historic low,” said Jeff Gundlach, head of research at investment firm Morningstar.
“We’re just going to see the dollar rise again.
That’s a very, very dangerous price.”
The dollar index has gained about 30% against the greenbacks against the year, meaning it has climbed about 15% against all currencies.
In the past week, the dollar gained a little more than 2% against its European peers.
It rose 0% against currencies from Japan, Australia and Hong Kong.
For the year to date, the U.S. dollar has gained more than 7%.
In the U: $10B buyout bid: Dollar up 3.8% to 92.30 yuan (US$10.10) from 88.75 yuan (€9.50) in March; Euro up 2.4% to 93.07 euros (€96.65) from 92.09 euros (euro) in February; Swiss franc up 0.9% to 0.834 francs (S$0.837) from 0.833 francs.
Dollar down 0.4%, to $US10.11, from $US11.02, to close at $US101.35.
Euro up 0% to €1.06, from €1,06 in January.
In Asia: China buys $10.1 billion yuan of debt from Hong Kong: Beijing said on Wednesday it would buy a $5.5 billion ($5.8 billion) stake in Hong Kong’s sovereign bond market to boost its balance of payments.
The deal will add about $1 billion to China’s debt burden and allow it to buy up debt from sovereign bondholders in Hong-Kong.
The deal comes as China has taken a tough stance on currency manipulation.
China’s central bank last month imposed restrictions on the purchase of foreign currencies.
That prompted the Hong Kong government to increase the value on its currency by 1,000 basis points to $12.70 to bolster its creditworthiness.
Dolex Dollar Express, a dollar-denominated company, announced on Wednesday that it had completed a $1-billion buyout of $10-billion worth of assets in China, including $2 billion of the company’s U.K. operations.
“Dolextime has decided to increase its capital allocation and is taking the next step in our efforts to build our business in China,” said Brian Felt, the company president.
“As we are in the process of raising capital and building our infrastructure, we are also looking at increasing our footprint in Hong Kong and other markets around the world.”
Dolexy Dollar Express announced that it was purchasing the Hong-based company, which operates online and online stores.
Felt declined to disclose how much money Dolex is paying.
Analysts say China’s economy has been buoyed by strong consumer spending and investment, and that the central bank’s policy to buy more debt is creating opportunities for the country’s big companies to sell their stakes in the country.
Chinese consumer spending, which grew 10.9 percent last year, is now the world leader.