Euro falls to fresh one-year low on recession fears
Friday, 12 September 2008
TOKYO, Sept 11 (AFP): The euro fell to a fresh one-year low against the dollar in Asian trade today on renewed fears over the health of the European economy, dealers said.
The euro slid to 1.3933 dollars in early Tokyo afternoon trade, its lowest since September 19. It later recovered to 1.3968, although still down from 1.3976 reached in New York late Wednesday.
The dollar eased to 107.42 yen from 107.81 and the euro to 150.02 yen from 150.67.
The single European currency was sold off after the European Commission warned that the 15-member eurozone is teetering on the brink of recession, dealers said.
The commission cut its eurozone growth estimate for the whole of 2008 to 1.3 per cent from a forecast of 1.7 per cent given in April, marking an even sharper slowdown from the 2.6 per cent growth recorded last year.
"As Europe and even emerging economies struggle from the fallout of the subprime crisis, there is sentiment that the US is doing relatively well compared with the rest of the world," said Sumitomo Trust Bank chief forex strategist Saburo Matsumoto.
Market players said they do not foresee the euro stabilising soon.
"I think that the credit fears surrounding financial institutions are passing their peak. Generally speaking, the dollar has reached its bottom," said Matsumoto.
That view was shared by Charles Dallara, managing director of the Institute of International Finance, a global association of financial institutions.
"I think that by and large the health of the largest 20 to 30 global financial institutions is improving," he told reporters in Tokyo.
The dollar was higher across the board in regional Asian trade. It firmed to 1.4404 Singapore dollars from 1.4304, to 1,109.65 South Korean won from 1,093.50 and to 9,454 Indonesian rupiah from 9,325.
It also strengthened to 32.04 Taiwan dollars from 31.87, to 47.09 Philippine pesos from 46.74 and to 34.72 Thai baht from 34.60.
The euro slid to 1.3933 dollars in early Tokyo afternoon trade, its lowest since September 19. It later recovered to 1.3968, although still down from 1.3976 reached in New York late Wednesday.
The dollar eased to 107.42 yen from 107.81 and the euro to 150.02 yen from 150.67.
The single European currency was sold off after the European Commission warned that the 15-member eurozone is teetering on the brink of recession, dealers said.
The commission cut its eurozone growth estimate for the whole of 2008 to 1.3 per cent from a forecast of 1.7 per cent given in April, marking an even sharper slowdown from the 2.6 per cent growth recorded last year.
"As Europe and even emerging economies struggle from the fallout of the subprime crisis, there is sentiment that the US is doing relatively well compared with the rest of the world," said Sumitomo Trust Bank chief forex strategist Saburo Matsumoto.
Market players said they do not foresee the euro stabilising soon.
"I think that the credit fears surrounding financial institutions are passing their peak. Generally speaking, the dollar has reached its bottom," said Matsumoto.
That view was shared by Charles Dallara, managing director of the Institute of International Finance, a global association of financial institutions.
"I think that by and large the health of the largest 20 to 30 global financial institutions is improving," he told reporters in Tokyo.
The dollar was higher across the board in regional Asian trade. It firmed to 1.4404 Singapore dollars from 1.4304, to 1,109.65 South Korean won from 1,093.50 and to 9,454 Indonesian rupiah from 9,325.
It also strengthened to 32.04 Taiwan dollars from 31.87, to 47.09 Philippine pesos from 46.74 and to 34.72 Thai baht from 34.60.