To enjoy the full Mail & Guardian online experience: please upgrade your browser
27 Sep 2007 12:46
The dollar fell to a new record low against the euro for a sixth successive session on Thursday, as investors braced for more economic reports that could reinforce expectations of another United States interest-rate cut in October.
US economic data this week has provided no respite for the beleaguered dollar and has supported the view the Federal Reserve Bank (fed) will cut its benchmark rate again after last week’s half-percentage point easing to 4,75%.
Overall, the reports provided evidence of further US housing-market decline, deteriorating consumer confidence and a sharper-than-expected fall in durable goods orders.
However, Fed funds futures show the chance of an October rate cut is down to 84% from a high of 92% helped by steadier equity markets this week.
Nevertheless traders will look to data due later in the day on sales of new homes in August and weekly jobless claims to see whether they make a stronger case for the Fed to cut again, which would further hurt the dollar’s yield appeal.
“The dollar has weakened across the board and that mood remains,” said Roberto Mialich, FX strategist at UniCredit.
However, he added that in line with trends seen in recent sessions, a fresh leg higher in euro/dollar would probably be followed by a mild bout of profit-taking.
The euro rose to a new peak of $1,4166 versus the dollar, according to Reuters data, before easing a little to stand at $1,448 by 09h59 GMT. It has risen nearly 4% against the dollar so far this month.—Reuters
Create Account | Lost Your Password?