Dollar drops to record low against euro

Peter Garnham
Financial Times
Friday October 26, 2007

The dollar fell to a record low against the euro on Friday as a recent run of weak US economic data heightened fears over the prospects for the world’s largest economy.

Analysts said poor housing market and durable goods figures from the US on Thursday had offered further evidence of economic slowdown that was very likely to prompt the Federal Reserve to cut US interest rates at its meeting October 31.

Derek Halpenny, senior currency economist at Bank of Tokyo-Mitsubishi UFJ, said the chances of US economic contraction in the fourth quarter could not be ruled out.

“With that prospect in store for the US, the dollar will continue to slide,” he said.

The dollar dropped 0.3 per cent to a record low of $1.4377 against the euro, fell 0.2 per cent to a three-month low of $2.0550 against the pound and lost 0.1 per cent to SFr1.1645 against the Swiss franc.

Surging oil prices, which powered to fresh record highs, also hurt the dollar and boosted the currencies of oil producing countries.

The dollar fell 0.6 per cent to a 33-year low of C$0.9605 against the Canadian dollar and dropped 0.3 per cent to NKr5.3690 against the Norwegian krone.

Full article here.