Dollar falls to fresh record lows
The dollar's slide appears inexorable
The dollar fell to yet another record low against the euro on Wednesday - and slipped to its weakest rate against sterling since 1992.
The US currency hit a low of $1.3360 against the euro in late afternoon trade in New York.
The pound meanwhile, boosted by positive UK manufacturing data, reached as high as $1.9262, as the downward pressure on the dollar continued.
The greenback has lost up to 10% of its value in recent months.
Factors have included concern at the giant US current account deficit, and poor US consumer confidence data.
No help from Europe
The European Central Bank has also not helped, with its president Jean-Claude Trichet saying on Tuesday that the bank was unlikely to intervene in favour of the dollar.
Analysts predicted further weakness for the US currency.
"Forces driving the dollar are still the same, concerns about the current account deficit," said Niels Christensen, senior currency strategist at Societe Generale in Paris.
"A rise in sterling, triggered by strong UK data, is also contributing to dollar weakness," he added.
"Sentiment against the dollar is deep-rooted."
Further factors
A number of additional US economic indicators this week could also affect the dollar.
Manufacturing data from the Institute of Supply Management reported an unexpected rise in output, and the monthly payrolls report is due on Friday.
Better than expected data could increase expectations that the US Federal Reserve will steadily raise interest rates to try and boost the dollar, but analysts say sentiment about the greenback was so poor that any positive effects are likely to be short-lived.
"U.S. economic data have been ignored when it's good, and added to negative dollar sentiment when it's bad," said Mr Christensen. |
