Dollar Vs. Euro- New Low
The dollar fell to a record low against the euro for a sixth straight session on Thursday. US economic data this week have provided no respite for the beleaguered dollar and have affirmed the view the Fed will cut its benchmark rate again after last week's half percentage point cut to 4.75 percent.
Overall, the reports provided evidence of further US housing market decline, deteriorating consumer confidence and a sharper-than-expected fall in durable goods orders. Chances of an October rate cut are down to about 84 percent from as high as 92 percent, according to Reuters data.
But traders will look to data due later in the day on new home sales in August and weekly jobless claims to see whether it makes a stronger case for the Fed to cut again, which would further hurt the dollar's yield appeal.
"It's more of the same. There is still the broad dollar bear trend so the dollar is performing poorly, particularly against the high-yielders like the Australian dollar, Turkish lira, and Hungarian forint," said Chris Turner, head of FX strategy at ING.
The euro rose to a new peak of $1.4166 versus the dollar, according to Reuters data. BY 0749 GMT, the euro traded at $1.4140, up 0.1 percent on the day. It has risen nearly 4 percent against the dollar so far this month.
The dollar index was at 78.450 after sliding to a 15-year low of 78.210 earlier this week, near an all-time low of 78.190.
The US currency edged up 0.1 percent against the broadly weaker yen at 115.59 yen.
US economic data stays a focal point for the foreign exchange market after the Fed cited the need to forestall damage to the broader economy from credit troubles when it cut interest rates last week.
Markets are awaiting the release of August new US home sales, which are estimated to have fallen to an annualised rate of 830,000 from 870,000 in July.
Analysts said an unexpectedly strong report could prompt a technical rebound in the dollar which some investors felt had been oversold.
Traders still expect the euro to continue its climb, although some worried that the euro zone economy may be hit by the US subprime mortgage mess and global credit crunch.
"The Fed's rate cuts and a weaker dollar may act to prevent the (US) economy suffering too much, which ironically given the extent of bad news already priced into the dollar, may eventually help the currency to recover. But we are probably some way off a turnaround in the dollar yet," said Calyon in a research note.
The yen, meanwhile, was under pressure against the euro as Tokyo shares rallied, drawing some investors back to carry trades in which the low-yielding currency is used to fund high-yielding currencies and assets.
The euro rose to a new 7-week high of 163.76 yen, with the euro paying little attention to a slightly softer than expected German jobs report for September and an in-line reading for August euro zone M3 money supply growth.
High-yielding currencies such as the Australian and New Zeal and dollar have also done well, rising 0.4 percent and 0. 7 percent versus the greenback. - Reuters
Overall, the reports provided evidence of further US housing market decline, deteriorating consumer confidence and a sharper-than-expected fall in durable goods orders. Chances of an October rate cut are down to about 84 percent from as high as 92 percent, according to Reuters data.
But traders will look to data due later in the day on new home sales in August and weekly jobless claims to see whether it makes a stronger case for the Fed to cut again, which would further hurt the dollar's yield appeal.
"It's more of the same. There is still the broad dollar bear trend so the dollar is performing poorly, particularly against the high-yielders like the Australian dollar, Turkish lira, and Hungarian forint," said Chris Turner, head of FX strategy at ING.
The euro rose to a new peak of $1.4166 versus the dollar, according to Reuters data. BY 0749 GMT, the euro traded at $1.4140, up 0.1 percent on the day. It has risen nearly 4 percent against the dollar so far this month.
The dollar index was at 78.450 after sliding to a 15-year low of 78.210 earlier this week, near an all-time low of 78.190.
The US currency edged up 0.1 percent against the broadly weaker yen at 115.59 yen.
US economic data stays a focal point for the foreign exchange market after the Fed cited the need to forestall damage to the broader economy from credit troubles when it cut interest rates last week.
Markets are awaiting the release of August new US home sales, which are estimated to have fallen to an annualised rate of 830,000 from 870,000 in July.
Analysts said an unexpectedly strong report could prompt a technical rebound in the dollar which some investors felt had been oversold.
Traders still expect the euro to continue its climb, although some worried that the euro zone economy may be hit by the US subprime mortgage mess and global credit crunch.
"The Fed's rate cuts and a weaker dollar may act to prevent the (US) economy suffering too much, which ironically given the extent of bad news already priced into the dollar, may eventually help the currency to recover. But we are probably some way off a turnaround in the dollar yet," said Calyon in a research note.
The yen, meanwhile, was under pressure against the euro as Tokyo shares rallied, drawing some investors back to carry trades in which the low-yielding currency is used to fund high-yielding currencies and assets.
The euro rose to a new 7-week high of 163.76 yen, with the euro paying little attention to a slightly softer than expected German jobs report for September and an in-line reading for August euro zone M3 money supply growth.
High-yielding currencies such as the Australian and New Zeal and dollar have also done well, rising 0.4 percent and 0. 7 percent versus the greenback. - Reuters
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