Dollar hits new record low against euro on housing jitters
Tuesday, 24 July 2007
TOKYO, July 23 (AFP): The dollar touched a fresh record low against the euro in Asian trade today, hit by jitters about US housing market problems and heavy falls on Wall Street at the end of last week, dealers said.
The euro rose as high as 1.3845 dollars in early Tokyo trading, beating its previous all-time best of 1.3843 seen Friday.
By mid-afternoon, the euro stood at 1.3829 dollars, up from 1.3820 Friday in New York.
The dollar was at 120.92 yen, close to a six-week low, after 121.26 in New York. The euro eased to 167.22 yen from 167.70.
"The dollar remains weak because of concerns about the US housing market and worse-than-expected corporate earning reports which weighed on stocks," said Kikuko Takeda, currency research manager at the Bank of Tokyo-Mitsubishi UFJ.
Dealers said the falls were affecting the 'carry trade' as investors grow more risk averse. Carry trade is a risky but popular practice of borrowing money in countries with low interest rates such as Japan and investing in countries with high interest rates such as Australia or Britain.
Some analysts expect this trend to continue and see the recent rise of the yen against the dollar as a temporary correction, while others believe the outlook for the US unit is worsening due to the sub-prime woes.
Japan's financial markets are also keeping a close watch on political events this week ahead of Sunday's upper house election, with polls showing Prime Minister Shinzo Abe's ruling party heading for heavy losses.
On the data front, US June existing home sales Thursday and second quarter gross domestic production growth Friday will be in focus as well as Japan's consumer price index Friday.
The dollar was mixed against Asian currencies.
It edged up to 32.80 Taiwan dollars from 32.74 Friday, to 915.30 South Korean won from 915.05 and to 9,080.0 Indonesian rupiah from 9,067.5.
It eased to 44.86 Philippine pesos from 44.88, to 29.552 Thai baht from 29.900 and to 1.5105 Singapore dollars from 1.5112.
The euro rose as high as 1.3845 dollars in early Tokyo trading, beating its previous all-time best of 1.3843 seen Friday.
By mid-afternoon, the euro stood at 1.3829 dollars, up from 1.3820 Friday in New York.
The dollar was at 120.92 yen, close to a six-week low, after 121.26 in New York. The euro eased to 167.22 yen from 167.70.
"The dollar remains weak because of concerns about the US housing market and worse-than-expected corporate earning reports which weighed on stocks," said Kikuko Takeda, currency research manager at the Bank of Tokyo-Mitsubishi UFJ.
Dealers said the falls were affecting the 'carry trade' as investors grow more risk averse. Carry trade is a risky but popular practice of borrowing money in countries with low interest rates such as Japan and investing in countries with high interest rates such as Australia or Britain.
Some analysts expect this trend to continue and see the recent rise of the yen against the dollar as a temporary correction, while others believe the outlook for the US unit is worsening due to the sub-prime woes.
Japan's financial markets are also keeping a close watch on political events this week ahead of Sunday's upper house election, with polls showing Prime Minister Shinzo Abe's ruling party heading for heavy losses.
On the data front, US June existing home sales Thursday and second quarter gross domestic production growth Friday will be in focus as well as Japan's consumer price index Friday.
The dollar was mixed against Asian currencies.
It edged up to 32.80 Taiwan dollars from 32.74 Friday, to 915.30 South Korean won from 915.05 and to 9,080.0 Indonesian rupiah from 9,067.5.
It eased to 44.86 Philippine pesos from 44.88, to 29.552 Thai baht from 29.900 and to 1.5105 Singapore dollars from 1.5112.