Dollar falls to new record low against euro
Tuesday, 30 October 2007
TOKYO, Oct 29 (AFP): The dollar sank to a new record low against the euro in Asian trade today as market players grew increasingly confident about the prospect of another US interest rate cut this week, analysts said.
The euro hit 1.4426 dollars in early Tokyo morning trade, breaking the 1.44 level for the first time since the single European currency's creation in 1999.
The euro stayed around the record levels in the afternoon, changing hands at 1.4420 dollars against 1.4391 dollars in New York Friday.
The dollar also slipped to 114.15 yen from 114.24 in New York, while the euro rose to 164.64 yen from 164.37.
"The market is confident about selling the dollar because the Federal Reserve is expected to cut rates again" Wednesday, said Kenichi Yumoto of Societe Generale.
"The dollar will be under pressure at least until the meeting as we are unlikely to see news that would erase uncertainty over the US economy by then," he said.
The euro may go as high as 1.45 dollars this week, he said.
The central bank cut borrowing costs by half a percentage point on September 18 to 4.75 per cent in the face of the housing slump and a credit crunch that was shaking the financial sector.
The yen was higher against the dollar as players cut back on risky carry trades that involve selling low-return currencies for higher-yielding ones, but it lost ground against the euro, dealers said.
"The dollar and yen remained the weak pair of currencies," said Matsumoto. The dollar was also down against most other Asian currencies.
The dollar fell to 1.4520 Singapore dollars from 1.4544 Singapore dollars Friday, to 32.37 Taiwan dollars from 32.41 and to 908.10 South Korean won from 913.45.
It also slipped to 9,085 Indonesian rupiah from 9,135 and edged down to 44.00 Philippine pesos from 44.04.
But the dollar rose sharply to 34.05 Thai baht from 31.66.
The euro hit 1.4426 dollars in early Tokyo morning trade, breaking the 1.44 level for the first time since the single European currency's creation in 1999.
The euro stayed around the record levels in the afternoon, changing hands at 1.4420 dollars against 1.4391 dollars in New York Friday.
The dollar also slipped to 114.15 yen from 114.24 in New York, while the euro rose to 164.64 yen from 164.37.
"The market is confident about selling the dollar because the Federal Reserve is expected to cut rates again" Wednesday, said Kenichi Yumoto of Societe Generale.
"The dollar will be under pressure at least until the meeting as we are unlikely to see news that would erase uncertainty over the US economy by then," he said.
The euro may go as high as 1.45 dollars this week, he said.
The central bank cut borrowing costs by half a percentage point on September 18 to 4.75 per cent in the face of the housing slump and a credit crunch that was shaking the financial sector.
The yen was higher against the dollar as players cut back on risky carry trades that involve selling low-return currencies for higher-yielding ones, but it lost ground against the euro, dealers said.
"The dollar and yen remained the weak pair of currencies," said Matsumoto. The dollar was also down against most other Asian currencies.
The dollar fell to 1.4520 Singapore dollars from 1.4544 Singapore dollars Friday, to 32.37 Taiwan dollars from 32.41 and to 908.10 South Korean won from 913.45.
It also slipped to 9,085 Indonesian rupiah from 9,135 and edged down to 44.00 Philippine pesos from 44.04.
But the dollar rose sharply to 34.05 Thai baht from 31.66.