Euro hits six-month dollar low
Euro hits six-month dollar low
LONDON (AFP) - The euro slid to a six-month low against the dollar on Tuesday amid concerns over a weaker eurozone, while the US currency fell versus the yen on fresh worries about the health of US mortgage giants, dealers said.The European single currency dropped to 1.4631 dollars -- the lowest level since February. In later London trading, the euro stood at 1.4671 dollars compared with 1.4696 in New York late on Monday.
Against the Japanese currency, the dollar slipped to 109.90 yen from 110.09.
German investor confidence improved slightly in August, a key economic indicator suggested on Tuesday, thanks to the recent fall in the price of oil and a weakening of the euro.
The ZEW research institute said its index of economic sentiment stood at minus 55.5 points, up 8.4 points from July when the survey hit its lowest level since its creation in December 1991.
"The pick-up in the German ZEW index in August shows that investors' expectations for the economy have improved, but this is little consolation given the still low level of the index," said Capital Economics analyst Jennifer McKeown.
Elsewhere, the dollar slipped against the yen as currency markets also took their cue from a slump on Wall Street overnight caused by a report that mortgage finance giants Fannie Mae and Freddie Mac were in need of a government bailout.
Another report that US investment bank Lehman Brothers would post a loss of 1.8 billion dollars for the third quarter added to market worries that the credit crunch is far from over.
The yen tends to benefit from jitters on the financial market because it is often used to fund risky trades.
But some market watchers predicted the yen's rebound would be short-lived.
"The dollar's recent rise was driven mainly by falls in oil prices," Minoru Shioiri, senior foreign exchange manager at Mitsubishi UFJ Securities, told Dow Jones Newswires.
"But because the majority view is that there is more room for falls in oil prices, the dollar's current fall is only a correction and it's expected to resume rising again."
Traders showed little reaction to a decision by the Bank of Japan to leave its key interest rate on hold at 0.50 percent as it downgraded its assessment of Asia's largest economy, predicting continued "sluggish" growth.
"The grimmer view may prompt some players to start speculating (about) a higher possibility of a rate cut down the road," said Tohru Sasaki, chief foreign-exchange strategist at JP Morgan Chase in Tokyo.
"But because interest rate differentials (between countries) are not a trading factor right now, such speculation would have little impact."
In London trading on Tuesday, the euro changed hands at 1.4671 dollars against 1.4696 late on Monday, at 161.24 yen (161.83), 0.7893 pounds (0.7879) and 1.6117 Swiss francs (1.6127).
The dollar stood at 109.90 yen (110.09) and 1.0987 Swiss francs (1.0972).
The pound was at 1.8592 dollars (1.8650).
On the London Bullion Market, the price of gold fell to 789.85 dollars per ounce from 796.25 dollars late on Monday
LONDON (AFP) - The euro slid to a six-month low against the dollar on Tuesday amid concerns over a weaker eurozone, while the US currency fell versus the yen on fresh worries about the health of US mortgage giants, dealers said.The European single currency dropped to 1.4631 dollars -- the lowest level since February. In later London trading, the euro stood at 1.4671 dollars compared with 1.4696 in New York late on Monday.Against the Japanese currency, the dollar slipped to 109.90 yen from 110.09.
German investor confidence improved slightly in August, a key economic indicator suggested on Tuesday, thanks to the recent fall in the price of oil and a weakening of the euro.
The ZEW research institute said its index of economic sentiment stood at minus 55.5 points, up 8.4 points from July when the survey hit its lowest level since its creation in December 1991.
"The pick-up in the German ZEW index in August shows that investors' expectations for the economy have improved, but this is little consolation given the still low level of the index," said Capital Economics analyst Jennifer McKeown.
Elsewhere, the dollar slipped against the yen as currency markets also took their cue from a slump on Wall Street overnight caused by a report that mortgage finance giants Fannie Mae and Freddie Mac were in need of a government bailout.
Another report that US investment bank Lehman Brothers would post a loss of 1.8 billion dollars for the third quarter added to market worries that the credit crunch is far from over.
The yen tends to benefit from jitters on the financial market because it is often used to fund risky trades.
But some market watchers predicted the yen's rebound would be short-lived.
"The dollar's recent rise was driven mainly by falls in oil prices," Minoru Shioiri, senior foreign exchange manager at Mitsubishi UFJ Securities, told Dow Jones Newswires.
"But because the majority view is that there is more room for falls in oil prices, the dollar's current fall is only a correction and it's expected to resume rising again."
Traders showed little reaction to a decision by the Bank of Japan to leave its key interest rate on hold at 0.50 percent as it downgraded its assessment of Asia's largest economy, predicting continued "sluggish" growth.
"The grimmer view may prompt some players to start speculating (about) a higher possibility of a rate cut down the road," said Tohru Sasaki, chief foreign-exchange strategist at JP Morgan Chase in Tokyo.
"But because interest rate differentials (between countries) are not a trading factor right now, such speculation would have little impact."
In London trading on Tuesday, the euro changed hands at 1.4671 dollars against 1.4696 late on Monday, at 161.24 yen (161.83), 0.7893 pounds (0.7879) and 1.6117 Swiss francs (1.6127).
The dollar stood at 109.90 yen (110.09) and 1.0987 Swiss francs (1.0972).
The pound was at 1.8592 dollars (1.8650).
On the London Bullion Market, the price of gold fell to 789.85 dollars per ounce from 796.25 dollars late on Monday
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