Dollar slumps to fresh lows against euro, pound
Thursday, 19 July 2007
TOKYO, July 18 (AFP): The dollar buckled today to a record low against the euro and a 26-year trough against the pound on growing fears about the economic fallout of problems in the US housing market, dealers said.
They said prospects of higher interest rates in Europe were adding to the heavy selling pressure on the dollar, which also lost ground against the yen as investors scaled back risker bets funded with cheap Japanese credit.
The euro climbed to an all-time high of 1.3832 dollars in Tokyo afternoon trade, up from 1.3781 in New York late Tuesday.
The pound jumped to 2.0550 dollars from 2.0465 on growing expectations of another rise in British interest rates to quell inflation, a move likely to make sterling more attractive to investors.
The dollar took a beating after US economic news failed to assuage concerns about the health of the US economy and the sub- prime mortgage sector catering to people with patchy credit histories, dealers said.
The dollar fell to 121.91 yen in Tokyo afternoon trade from 122.27 in New York late Tuesday. The euro eased to 168.30 yen from 168.54.
"Strong concern over the troubles in the US sub-prime mortgage market are weighing on the dollar," said Masaki Fukui, a senior market economist at Mizuho Corporate Bank.
The markets were jittery ahead of Federal Reserve chairman Ben Bernanke's testimony to Congress on the state of the US economy later Wednesday, as well as US consumer price inflation numbers.
Bernanke comments "could help the US dollar, as he will likely reiterate that inflation is the primary concern, rather than a much weaker economy, and also play down the potential for the sub-prime mortgage meltdown to put a large dent in the economy," predicted analysts at NAB Capital.
They said prospects of higher interest rates in Europe were adding to the heavy selling pressure on the dollar, which also lost ground against the yen as investors scaled back risker bets funded with cheap Japanese credit.
The euro climbed to an all-time high of 1.3832 dollars in Tokyo afternoon trade, up from 1.3781 in New York late Tuesday.
The pound jumped to 2.0550 dollars from 2.0465 on growing expectations of another rise in British interest rates to quell inflation, a move likely to make sterling more attractive to investors.
The dollar took a beating after US economic news failed to assuage concerns about the health of the US economy and the sub- prime mortgage sector catering to people with patchy credit histories, dealers said.
The dollar fell to 121.91 yen in Tokyo afternoon trade from 122.27 in New York late Tuesday. The euro eased to 168.30 yen from 168.54.
"Strong concern over the troubles in the US sub-prime mortgage market are weighing on the dollar," said Masaki Fukui, a senior market economist at Mizuho Corporate Bank.
The markets were jittery ahead of Federal Reserve chairman Ben Bernanke's testimony to Congress on the state of the US economy later Wednesday, as well as US consumer price inflation numbers.
Bernanke comments "could help the US dollar, as he will likely reiterate that inflation is the primary concern, rather than a much weaker economy, and also play down the potential for the sub-prime mortgage meltdown to put a large dent in the economy," predicted analysts at NAB Capital.