Dollar hits record low against euro on housing jitters
Thursday, 12 July 2007
TOKYO, July 11 (AFP): The dollar briefly hit another record low against the euro and was close to a 26-year nadir against sterling in Asian trade today amid concerns over the US housing market, dealers said.
Jitters about the impact on the US economy of the mortgage sector troubles prompted investors to scale back riskier investments, boosting currencies such as the yen which has been hit hard by capital outflows in recent months.
The euro struck an all-time high of 1.3787 dollars in early Asian trade while the dollar struck a low of 120.97 yen briefly before rebounding against both currencies in volatile trade. The market sold "the dollar amid concerns over the sub-prime market," said Yosuke Hosokawa, head of forex group at Chuo Mitsui Trust Bank.
By late afternoon trade in Tokyo, the dollar was at 121.69 yen, down from 121.76 late Tuesday in New York.
The euro stood at 1.3743 dollars after 1.3746 in New York, while falling to 167.24 yen from 167.47.
Carry trades are when investors borrow money in countries with low interest rates such, as Japan, to invest in countries with higher returns, such as Britain, Australia or the United States.
The dollar's recent weakness has been spurred by expectations that the US Federal Reserve will hold interest rates steady in the near future.
Jitters about the impact on the US economy of the mortgage sector troubles prompted investors to scale back riskier investments, boosting currencies such as the yen which has been hit hard by capital outflows in recent months.
The euro struck an all-time high of 1.3787 dollars in early Asian trade while the dollar struck a low of 120.97 yen briefly before rebounding against both currencies in volatile trade. The market sold "the dollar amid concerns over the sub-prime market," said Yosuke Hosokawa, head of forex group at Chuo Mitsui Trust Bank.
By late afternoon trade in Tokyo, the dollar was at 121.69 yen, down from 121.76 late Tuesday in New York.
The euro stood at 1.3743 dollars after 1.3746 in New York, while falling to 167.24 yen from 167.47.
Carry trades are when investors borrow money in countries with low interest rates such, as Japan, to invest in countries with higher returns, such as Britain, Australia or the United States.
The dollar's recent weakness has been spurred by expectations that the US Federal Reserve will hold interest rates steady in the near future.