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U.S. dollar continues its slide
HITS 15-YEAR LOW AGAINST 5 CURRENCIES
By Matt Moore
ASSOCIATED PRESS
NEW YORK --
The dollar failed to rally yesterday, dropping to a new record low against the euro and a 15-year low against five other major currencies as investors continued to act on last week's larger-than-expected interest rate cut and economic data expected this week on August consumer spending and home sales.
The 13-nation euro rose as high as $1.4130 yesterday, its highest level since its debut in 1999, before drifting back to $1.4087 in late New York trading. That compared with a previous peak of $1.4119 on Friday, and the $1.4083 it bought in New York late that day. In other trading yesterday, the British pound edged higher to $2.0214 from $2.0200.
The Federal Reserve's half-point interest rate cut last week to 4.75 percent came in response to market turbulence in the United States and elsewhere amid the subprime mortgage crisis. Investors this week will be looking for signs that U.S. inflation is under control. The market is also hoping that readings this week on demand for U.S. durable goods, the housing market and consumer spending power will show that the U.S. economy isn't heading for recession.
"The Fed is not going to respond once with interest rates and call it a day," said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Conn. "It's very likely that there'll be a series of rate cuts."
More rate cuts could further weaken the dollar, as dollar-denominated investments become less attractive.
http://www.lexingtonheraldleader.com/101/story/185553.html
HITS 15-YEAR LOW AGAINST 5 CURRENCIES
By Matt Moore
ASSOCIATED PRESS
NEW YORK --
The dollar failed to rally yesterday, dropping to a new record low against the euro and a 15-year low against five other major currencies as investors continued to act on last week's larger-than-expected interest rate cut and economic data expected this week on August consumer spending and home sales.
The 13-nation euro rose as high as $1.4130 yesterday, its highest level since its debut in 1999, before drifting back to $1.4087 in late New York trading. That compared with a previous peak of $1.4119 on Friday, and the $1.4083 it bought in New York late that day. In other trading yesterday, the British pound edged higher to $2.0214 from $2.0200.
The Federal Reserve's half-point interest rate cut last week to 4.75 percent came in response to market turbulence in the United States and elsewhere amid the subprime mortgage crisis. Investors this week will be looking for signs that U.S. inflation is under control. The market is also hoping that readings this week on demand for U.S. durable goods, the housing market and consumer spending power will show that the U.S. economy isn't heading for recession.
"The Fed is not going to respond once with interest rates and call it a day," said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Conn. "It's very likely that there'll be a series of rate cuts."
More rate cuts could further weaken the dollar, as dollar-denominated investments become less attractive.
http://www.lexingtonheraldleader.com/101/story/185553.html