Euro plumbs new six-month lows against dollar
Wednesday, 13 August 2008
TOKYO, Aug 12, (AFP): The euro slid to a fresh six-month low against the dollar in Asian deals today as traders continued to focus on the deteriorating economic health of the eurozone, dealers said.
Falling oil prices also helped prop up the greenback, which held firm close to a recent seven-month high against the yen.
The euro dropped to 1.4818 dollars in Tokyo afternoon trade, down from 1.4898 in New York late on Monday. The euro fell to 163.32 yen from 164.04.
The dollar rose to 110.21 yen from 110.10.
"Market sentiment is focused on slowing growth in Europe," said Kenichi Yumoto, vice president of forex sales at Societe Generale.
In the latest gloomy report from the eurozone, French industrial output fell sharply in May and June, raising a risk that overall activity in the second- biggest eurozone economy might have contracted in the second quarter.
Expectations of an interest rate hike by the European Central Bank (ECB) have receded in light of recent weak eurozone economic data.
The euro gained little support from a warning by ECB council member Klaus Liebscher that there is "absolutely no room for complacency" on inflation.
The comments prompted some investors to square their sell positions on the euro, but investors soon returned to buying the dollar, said Yumoto.
The ECB kept its lending rates steady last week at 4.25 per cent, acknowledging worries about the health of the eurozone economies.
Traders were also monitoring a conflict between Georgia and Russia that has unsettled sentiment towards the euro.
But they largely ignored news that Japan's wholesale inflation hit a 27-year high of 7.1 per cent in July because the country's central bank is not expected to raise interest rates any time soon, dealers said.
"The dollar is currently in a broad buyback trend," Deutsche Securities analyst Koji Fukaya told Dow Jones Newswires. "And there is just no domestic reason to buy the yen."
Japan's government is widely expected to report on Wednesday that Asia's largest economy shrank in the second quarter of 2008.
Against Asian currencies, the dollar rose to 1.4136 Singapore dollars from 1.4078 on Monday, to 1,034.65 South Korean won from 1,032.55, to 44.57 Philippine pesos from 44.41, and to 33.85 Thai baht from 33.73.
Falling oil prices also helped prop up the greenback, which held firm close to a recent seven-month high against the yen.
The euro dropped to 1.4818 dollars in Tokyo afternoon trade, down from 1.4898 in New York late on Monday. The euro fell to 163.32 yen from 164.04.
The dollar rose to 110.21 yen from 110.10.
"Market sentiment is focused on slowing growth in Europe," said Kenichi Yumoto, vice president of forex sales at Societe Generale.
In the latest gloomy report from the eurozone, French industrial output fell sharply in May and June, raising a risk that overall activity in the second- biggest eurozone economy might have contracted in the second quarter.
Expectations of an interest rate hike by the European Central Bank (ECB) have receded in light of recent weak eurozone economic data.
The euro gained little support from a warning by ECB council member Klaus Liebscher that there is "absolutely no room for complacency" on inflation.
The comments prompted some investors to square their sell positions on the euro, but investors soon returned to buying the dollar, said Yumoto.
The ECB kept its lending rates steady last week at 4.25 per cent, acknowledging worries about the health of the eurozone economies.
Traders were also monitoring a conflict between Georgia and Russia that has unsettled sentiment towards the euro.
But they largely ignored news that Japan's wholesale inflation hit a 27-year high of 7.1 per cent in July because the country's central bank is not expected to raise interest rates any time soon, dealers said.
"The dollar is currently in a broad buyback trend," Deutsche Securities analyst Koji Fukaya told Dow Jones Newswires. "And there is just no domestic reason to buy the yen."
Japan's government is widely expected to report on Wednesday that Asia's largest economy shrank in the second quarter of 2008.
Against Asian currencies, the dollar rose to 1.4136 Singapore dollars from 1.4078 on Monday, to 1,034.65 South Korean won from 1,032.55, to 44.57 Philippine pesos from 44.41, and to 33.85 Thai baht from 33.73.