Euro pressured by Georgia violence
Tuesday, 12 August 2008
TOKYO, Aug 11 (AFP): The euro sank to a five-month low against the dollar in Asian trade today, hit by worries about the fighting in Georgia and signs of slowing eurozone economic growth, dealers said.
The resurgent dollar also hit a seven-month high against the yen amid signs the US economic slowdown is spreading to other major economies. High- yielding currencies such as the Australian dollar and the British pound fell heavily.
The euro dropped to as low as 1.4908 dollars. In late Tokyo trade it was at 1.4975, down from 1.5013 in New York Friday. The euro slipped to 164.83 yen after 165.35.
Russia kept up its attacks on Georgia Monday despite growing international pressure for a ceasefire.
Dealers said the euro was also weighed down by fading prospects of an interest rate rise by the European Central Bank (ECB) amid growing concerns about the health of the eurozone economies.
Against the yen, the dollar rose to as high as 110.40, before easing back to 110.05, compared with 110.11 in New York on Friday.
The US currency has fallen heavily over the past year as the Federal Reserve slashed interest rates to shore up the US financial markets and economy in the face of a housing slump and credit crunch.
But with concerns now growing that the eurozone and Japan could be heading for recessions, there is speculation that the greenback may have reached a turning point.
Italy on Friday reported a contraction in its economy in the second quarter. Japan is also expected to report on Wednesday that its economy shrank in the three months through June.
The Australian dollar also hit a seven-month low against the dollar on Monday, pressured by falling commodity prices. The currency was at 88.51 US cents in late Asian trade, down from 89.29 US cents on Friday.
The Australian dollar was "caught up in a wave of US dollar- buying related to mounting evidence that economic growth is slowing rapidly across the world," noted National Australia Bank strategist John Kyriakopoulos.
Against Asian currencies, the US dollar rose to 1.4078 Singapore dollars from 1.3965 on Friday, to 1,032.55 South Korean won from 1,026.10 and to 31.19 Taiwan dollars from 31.02.
The resurgent dollar also hit a seven-month high against the yen amid signs the US economic slowdown is spreading to other major economies. High- yielding currencies such as the Australian dollar and the British pound fell heavily.
The euro dropped to as low as 1.4908 dollars. In late Tokyo trade it was at 1.4975, down from 1.5013 in New York Friday. The euro slipped to 164.83 yen after 165.35.
Russia kept up its attacks on Georgia Monday despite growing international pressure for a ceasefire.
Dealers said the euro was also weighed down by fading prospects of an interest rate rise by the European Central Bank (ECB) amid growing concerns about the health of the eurozone economies.
Against the yen, the dollar rose to as high as 110.40, before easing back to 110.05, compared with 110.11 in New York on Friday.
The US currency has fallen heavily over the past year as the Federal Reserve slashed interest rates to shore up the US financial markets and economy in the face of a housing slump and credit crunch.
But with concerns now growing that the eurozone and Japan could be heading for recessions, there is speculation that the greenback may have reached a turning point.
Italy on Friday reported a contraction in its economy in the second quarter. Japan is also expected to report on Wednesday that its economy shrank in the three months through June.
The Australian dollar also hit a seven-month low against the dollar on Monday, pressured by falling commodity prices. The currency was at 88.51 US cents in late Asian trade, down from 89.29 US cents on Friday.
The Australian dollar was "caught up in a wave of US dollar- buying related to mounting evidence that economic growth is slowing rapidly across the world," noted National Australia Bank strategist John Kyriakopoulos.
Against Asian currencies, the US dollar rose to 1.4078 Singapore dollars from 1.3965 on Friday, to 1,032.55 South Korean won from 1,026.10 and to 31.19 Taiwan dollars from 31.02.