Dollar Gains Most Since May 2005 Versus Euro as Inflation Rises

Dec. 14 -- The dollar advanced the most against the euro since May 2005 after the biggest increase in consumer inflation in two years prompted traders to pare expectations for interest-rate reductions.

The dollar gained against 13 of the 16 most-actively traded currencies as futures show the probability of a Federal Reserve rate cut in January declined from 100 percent. The U.S. currency has risen 1.5 percent against the euro over the past five days, the biggest weekly increase since August.

``The fundamental picture started to move in the dollar's favor,'' said Michael Malpede, a senior currency analyst in Chicago at MF Global Ltd., the world's largest broker of exchange-traded futures and options contacts. ``Inflation is picking up, making it difficult for the Fed to aggressively cut interest rates.''

Against the euro, the dollar rose 1.38 percent to $1.4432 at 11:47 a.m. in New York, from $1.4633 yesterday. It strengthened to 113.41 yen from 112.21. The dollar touched $1.4421 per euro and 113.44 yen, both the strongest levels since November. The euro fell to 163.55 yen from 164.21. The pound weakened to $2.0202 from $2.0414 yesterday. The Swiss franc declined to 1.1536 per dollar from 1.1412.

Interest-rate futures on the Chicago Board of Trade show traders have reduced bets on Fed rate cuts. The chances the Fed will lower its benchmark rate by a half-percentage point to 3.75 percent in the next three months are 36 percent, from 61 percent a week ago. The odds of a quarter-percentage point cut to 4 percent next month are 82 percent.

Krone, Rand, Australia

Currencies in Norway, South Africa and Australia dropped against the yen as rising inflation dampened the outlook for global growth, pushing investors to pare holdings of higher- yielding assets funded by loans in Japan. A decrease in oil and gold also reduced the appeal of financial assets in these commodities-exporting nations.

Norway's krone led declines among the 16 major currencies against the yen, losing 0.9 percent. South Africa's rand and the Australian dollar fell 0.5 percent. Against the dollar, the krone weakened 1.8 percent while the rand dropped 1.4 percent.

The dollar's gain this week pared its loss this year to 8.6 percent against the euro. The Fed's three interest-rate cuts since September have dimmed the allure of U.S. financial assets. The euro rose to a record high of $1.4967 on Nov. 23.

The U.S. Dollar Index traded on ICE Futures in New York rose 1 percent to 77.321. It earlier touched 77.405, the highest since Oct. 25. The gauge has rebounded from 74.484 on Nov. 23, the weakest since it started trading in 1973. The dollar will strengthen to $1.43 per euro by the end of the month, according to Malpede.

U.S. Currency Gains

The dollar advanced 1.4 percent against the yen this week, heading for a third weekly gain, as stronger-than-forecast growth in U.S. retail sales and industrial production allayed concern that credit-market turmoil and a housing slump will curb economic growth.

The U.S. currency has increased 2.1 percent against the South African rand, 1.5 percent versus the Australian currency and 1 percent versus the New Zealand dollar over the same period.

The dollar's gain against the euro accelerated earlier after breaching a key resistance level at $1.4650, said Toshi Honda, a currency strategist in London at Mizuho Corporate Bank Ltd. A break above a resistance level may lead to new highs, according to technical analysis that uses price charts to forecast currency movements.

``The move approaching $1.50 was too rapid, irrational,'' Honda said. ``It was driven by fear of a U.S. economic meltdown, but I don't think the fear is going to be materialized. The overall sentiment is positive for the dollar.''

He predicted euro-dollar will end the year below $1.40.

Fed Plan

The dollar was helped this week by a coordinated plan led by the Fed to alleviate the credit crunch and the U.S. central bank's third cut in interest rates this year to avert a recession in the world's largest economy.

U.S. consumer prices increased 0.8 percent last month after a 0.3 percent gain in October. The median forecast in a Bloomberg News survey was 0.6 percent.

``The data suggested the Fed probably will be less aggressive to cut rates from now on,'' said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York. ``This will take some of the heat off the dollar. The dollar is getting a short-term boost.''

The U.S. currency will reach $1.45 per euro by the end of March and $1.40 by the end of 2008, according to the median forecast of 44 economists in a Bloomberg survey.

Horror Under the Hijab

A Canadian Muslim teenager was murdered this week for trying to establish her own identity by moving out of her family home and for reportedly defying her father’s command to cover her head. Meanwhile, Canada’s largest daily newspaper, the Toronto Star, disgracefully hid its own head in the sand.

Pakistani-Canadian Aqsa Parvez, 16, was strangled by her father in an honor murder last Monday in the Toronto-area city of Mississauga. Refusing to wear the Islamic hijab, Parvez, who was herself born in Pakistan, wanted to live the normal lifestyle of a Canadian teenage girl, but ran into conflict with her strict, religious father. One friend and schoolmate said the Canadian teenager was afraid of her father and often came to school wearing bruises, the result of his violence.

“She was scared of her father; he was always controlling her,” the friend told the National Post, a Canadian national newspaper. “She wasn’t allowed to go out or do anything.”

Nevertheless, the Grade 11 student, according to friends, would leave home wearing the hijab but arrive at school in western-style clothes, having changed on the way. This was part of her courageous desire to live her own life and overcoming the fear in which she lived.

Despite the Canadian public’s disgust and outrage over this murder and in contrast to Parvez’s courage, the Toronto Star avoided tackling head on the issue of Muslim male intolerance and violence toward female family members who wish to establish their independence and lead their own lives. Instead, the Star published a story that, incredibly, accuses a supposedly racist Canadian society for being equally responsible for the cultural “tension” in Muslim families concerning the issue of head coverings. In the story, two young Muslim women say some Muslim families do not want their daughters to wear the hijab because it will make them “the targets of racism.” If only Aqsa Parvez could have lived in such a family! Not surprisingly, no Muslim women or girls were interviewed who are forced to wear the Islamic clothing.

But this unbelievable attempt to detract people’s attention from the real issue of Muslim intolerance, even hatred, towards females’ desire for freedom and to establish a moral equivalency between a tolerant Canadian society and an Islamic culture that has seen dozens of Muslim women perish in honor killings in Western Europe (48 in Germany alone between 1996 and 2006) should not come as a surprise to anyone who has ever read the left-leaning Star.

The politically correct Star, you see, is Canada ’s paper of multiculturalism. Hardly an issue ever comes out without the word "racism" appearing somewhere on its pages. (multicultural societies always have racism as their rallying cry). As a result of its support of, and belief in, the possibility of establishing a multicultural country, left-wing media organs like the Star and the Canadian Broadcasting Corporation will never deeply investigate any negative aspects of cultures newly arrived in Canada. Such revelations, they fear, may damage their unrealizable multicultural dream.

By the way, in the Star’s and CBC’s world, racism does not exist in the newcomers’ cultures. And if it does, it is the fault of the host Canadian society. In fact, the same day the blame-racist Canadian society story appeared, a Toronto Star columnist wrote that English Canadians, one of the Canada’s two founding peoples who now make up only about fifteen per cent of Toronto’s population, do not welcome immigrants with enough love -- again the host country’s fault.

Leftist Canadian women’s groups are also passengers in the same see-no-evil-in-new-cultures, hear-no-evil-in-new-cultures boat as the Star, since they also support multiculturalism. Their hypocrisy does not even allow them to criticize and intervene to help oppressed Muslim females let alone oppose the polygamy some Muslims are practicing here in Canada. For this, western feminists are criticized by Muslim feminists both in Canada and in Western Europe. These Muslim feminists say they can’t get over the fact that western feminists pretend they care so much for the rights of women in some land thousands of miles away but ignore the oppression of Third World women right in their own societies. The silence of their western sisters, these Muslim feminists point out, facilitates this oppression.

But if left-wing Canadian media ever investigates the Parvez killing properly, they will most likely have to face some hard, cold and uncomfortable cultural facts. While the refusal to wear the hijab has been reported to be a significant contributing factor in her murder, the main reason for the brutal killing, they may discover, is that the terrified Muslim teenager had moved out of her home two weeks earlier and was living with a friend. In fact, one newspaper quoted another of Aqsa’s friends who said her father threatened to kill her if she left the family home. Moving out, western European social workers say, is a death sentence for these woman. In a strict, religious Muslim family, no woman is allowed to establish an identity of her own outside of her family, religion and culture.

Aqsa Parvez’s death, they will learn, may also have been a family decision. The high school student, one of eight children, lived, according to one newspaper report, in a house with eleven other people in an extended family. Like the Hatun Surucu murder in 2005 in Germany that awoke the people of that country to the suffering of Muslim women in their midst, police are investigating Parvez’s killing as a premeditated one that involved the concurrence of several family members, possibly even including female ones.

After all, one newspaper reported Aqsa’s older sister used to spy on her at school for the family and Aqsa only discarded the hijab after her sister had graduated. The dead teenager had even established her own Facebook site with her photo and uncovered hair on it accompanied by comments about popular culture. Tragically, this also may have led to her demise as her non-traditional, independent lifestyle was now visible to everyone.

Moreover, the unfortunate teenager was probably also, like Hatun Surucu, lured to her death by her brother, possibly her favorite one. The police are currently investigating this angle. The independent Surucu was lured to a bus stop to meet a brother who murdered her to restore the family’s honor because she was “living like a German.” Parvez was picked up by her brother at a bus stop, saying he would bring her home to get a change of clothes, where she was then killed, for living like a Canadian. At this point in time, the brother has been charged with obstruction of justice.

What will probably be the most sickening discovery is that none of the people involved in Aqsa’s killing will express any regret or remorse. On the contrary, they will be happy because they believe they have restored their family’s honor and will be respected for having done so by like-minded others in their community who, like them, practice an anti-civilizational legal and cultural apartheid in the country hosting them and their families. The Star will never investigate why such people come to Canada and other western countries but never really live here.

But unlike the Star, not everyone has their head in the sand. Tarek Fatah, founder of the Canadian Muslim Congress, calls Parvez’s murder a blight on Islam.“In my mind, this was an honor killing,” said Fatah, adding its going to get worse before it gets better.

And as if he was talking directly to the Toronto Star, the Muslim community leader also said there needs to be an honest debate about this murder and that “the media should not just talk to the ones wearing head scarves but the ones who do not want to.”

With or without the hijab on, Aqsa Parvez would only have nodded her agreement with that.