US DOLLAR FALLS ..EURO/NEW ALL TIME HIGH

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US DOLLAR FALLS ..EURO/NEW ALL TIME HIGH

 user 2007-07-13 at 10:37:00 am Views: 57
  • #18362

    Euro Hits All-Time High Against Dollar
    FRANKFURT,
    Germany 07 07  – The euro broke through the US$1.38 mark Friday for the
    first time, as persistent worries about the strength of the U.S.
    economy pushed the European currency higher.The 13-nation euro moved as
    high as US$1.3811 in afternoon European trading before falling back to
    US$1.3805. That was up from US$1.3783 in New York late Thursday.The
    dollar, which has been under pressure all week, fell after the U.S.
    Commerce Department reported that retail sales in June fell by 0.9
    percent compared with the previous month. That was its biggest drop
    since August 2005, and came as demand for cars, furniture and building
    supplies plummeted.U.S. economic data are being scrutinized closely for
    hints on the U.S. Federal Reserve’s future interest rate course.The Fed
    has left its benchmark rate unchanged at 5.25 percent for a year after
    two years of steady increases.That contrasts with the course of the
    European Central Bank, which has raised rates steadily and is expected
    to do so again to 4.25 percent in September. The Bank of England last
    week increased its benchmark rate to 5.75 percent, a six-year high.

    Higher
    interest rates, a weapon against inflation, can bolster a currency by
    giving better returns on fixed-income investments.Concerns about the
    strength of the U.S. economy, fueled largely by woes in the subprime
    housing sector, have boosted the euro against the dollar.Higher
    interest rates and the economic slowdown have lead to more defaults in
    subprime mortgages, which are loans to borrowers with weak or spotty
    credit histories.The British pound continued to trade around 26-year
    highs against the dollar Friday. On Friday, it rose to US$2.0343 from
    its level late Thursday of US$2.0304.The dollar slipped to 122.24
    Japanese yen from 122.41 yen.