-------- Original Message --------
Subject: Dollar hits new record low against euro
Date: Thu, 23 Dec 2004 17:03:18 -0700
From: "MOM" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Dollar hits new record low against euro
BERLIN (AP) - The dollar hit an all-time low Thursday against the
euro,
which was worth $1.3483 after a mixed economic report from the U.S.
Commerce Department.
The euro hovered around the previous mark of $1.3470, set Dec. 7, in
light European trading for most of the day before spiking after the
report.
The 12-nation currency has risen sharply since September, when it was
trading around $1.20, over persistent concerns about the ballooning
U.S.
trade and budget deficits.
With no end to those problems in sight, analysts see the trend
continuing.
"I can see it finishing the year around $1.35 and we see that it's
going
to be a steady track upward for the euro/dollar in 2005, finishing the
year around $1.40," said Adrian Hughes, a currency strategist with
HSBC
in London.
The euro initially fell against the dollar after its 1999 debut, but
it
has risen 63% since bottoming at 82 cents in October 2000.
The Commerce Department reported that consumer spending grew a modest
0.2% in November, slightly weaker than the 0.3% forecast by analysts
and
far short of the 0.8% reported for October.
At the same time, incomes grew 0.3% in November, more than the 0.2%
that
had been forecast, but weaker than in October, when it rose 0.6%.
The euro spike may also have something to do with the small amount of
trading just before Christmas, Hughes said.
"The markets are not as they typically are, we're seeing very low
activity and very low risk appetites in the markets for new
positions,"
he said.
The U.S. government says it has a "strong dollar" policy but also that
it
will let market forces set the currency's value. Most analysts believe
the United States is content to let the dollar fall because it has
been
making American exports cheaper for overseas buyers.
But Europe's fragile economic recovery is export-driven, and the
strong
euro has either been making European goods more expensive overseas or
cutting into producers' profits if they try to hold prices steady.
European Central Bank President Jean-Claude Trichet has called the
rapid
increase in the euro's value both "unwelcome" and "brutal." However,
the
bank has yet to intervene in currency markets to halt the dollar's
slide.
The pound was trading at $1.9179 and the dollar bought 103.90 Japanese
yen at midafternoon in Europe.
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