Thursday, January 3, 2008

Dollar hurt by poor US data, euro hits record sterling high

The dollar fell against the euro on Thursday as weak US economic data fueled fears that the world's largest economy may be heading into recession and a series of interest rate cuts.

Elsewhere the euro struck a fresh historic high against sterling and gold hit an all-time peak on the back of the dollar's woes, they added.

In midday European trade, the euro rose to 1.4769 dollars from 1.4721 dollars in New York late on Wednesday.

Against sterling, or the British pound, the euro struck a record high 74.81 pence as the market bet on further rate cutting by the Bank of England.

Gold meanwhile profited from the weak dollar as dealers rushed to switch investments from the US unit into bullion, which is seen as a safe haven.

The yellow metal jumped to an historic peak of 867.90 dollars an ounce.

"The US dollar decline accelerated on growing fears that the economy could slip into recession and on growing views that the Federal Reserve could continue to reduce interest rates to stave off the economic fallout from a global credit crisis," said Standard Bank analyst Teo Kah Oon.

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