Dollar plunges to fresh lows against euro, yen
Tuesday, 18 March 2008
TOKYO, March 17 (AFP): The dollar plunged in Asian trade today on fears that the credit crunch could claim more victims on Wall Street, hitting a record low against the euro and a 12-year trough versus the yen, dealers said.
An emergency rate cut by the US Federal Reserve only added to the sense of crisis after the near-collapse of US investment bank Bear Stearns, which is being sold to JPMorgan Chase at a rock- bottom price, they said.
The euro struck a new lifetime peak of 1.5905 in early trade while the dollar fell by as much as 3.5 per cent from levels in New York Friday to hit 95.75 yen, a bottom not seen since September 1995.
The greenback later clawed back some ground to 96.70, still sharply lower compared with 99.18 in New York late Friday.
The euro later stood at 1.5840 dollars, up from 1.5669 late Friday, while dropping to 153.15 yen after 155.46.
In a rare weekend announcement, the Federal Reserve said it was cutting by a quarter-point to 3.25 per cent its primary credit rate, which is offered at the Fed's discount window for institutions "in sound condition."
Traders are expecting a cut of 50 or 75 basis points to the US central bank's key federal funds rate Tuesday.
Markets are even pricing in a chance that the central bank will slash the benchmark rate by 100 basis points to 2.0 per cent, dealers said.
The soaring yen is causing worries that Japan's export-led recovery from a decade-long slump could stall.
Despite its troubles, the dollar was higher against regional Asian currencies, rising to 1.3868 Singapore dollars from 1.3820 Friday and to a two-year high of 1,025.80 South Korean won from 995.40.
It gained to 41.65 Philippine pesos from 41.55, to 9,310 Indonesian rupiah from 9,265 and to 30.97 Taiwan dollars from 30.71, while easing to 31.41 Thai baht from 31.43.
An emergency rate cut by the US Federal Reserve only added to the sense of crisis after the near-collapse of US investment bank Bear Stearns, which is being sold to JPMorgan Chase at a rock- bottom price, they said.
The euro struck a new lifetime peak of 1.5905 in early trade while the dollar fell by as much as 3.5 per cent from levels in New York Friday to hit 95.75 yen, a bottom not seen since September 1995.
The greenback later clawed back some ground to 96.70, still sharply lower compared with 99.18 in New York late Friday.
The euro later stood at 1.5840 dollars, up from 1.5669 late Friday, while dropping to 153.15 yen after 155.46.
In a rare weekend announcement, the Federal Reserve said it was cutting by a quarter-point to 3.25 per cent its primary credit rate, which is offered at the Fed's discount window for institutions "in sound condition."
Traders are expecting a cut of 50 or 75 basis points to the US central bank's key federal funds rate Tuesday.
Markets are even pricing in a chance that the central bank will slash the benchmark rate by 100 basis points to 2.0 per cent, dealers said.
The soaring yen is causing worries that Japan's export-led recovery from a decade-long slump could stall.
Despite its troubles, the dollar was higher against regional Asian currencies, rising to 1.3868 Singapore dollars from 1.3820 Friday and to a two-year high of 1,025.80 South Korean won from 995.40.
It gained to 41.65 Philippine pesos from 41.55, to 9,310 Indonesian rupiah from 9,265 and to 30.97 Taiwan dollars from 30.71, while easing to 31.41 Thai baht from 31.43.