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Dollar falls to record euro low | Dollar falls to record euro low |
(about 2 hours later) | |
The dollar has fallen to a fresh record low against the euro, after weak economic data renewed fears that the US economy may be facing recession. | The dollar has fallen to a fresh record low against the euro, after weak economic data renewed fears that the US economy may be facing recession. |
After figures showed a sharp rise in US home foreclosures and another fall in American consumer confidence, the euro hit an all-time high of $1.50. | |
Traders say the Federal Reserve may have to cut interest rates again, which would further undermine the dollar. | |
Meanwhile, US crude oil rose $2.20 to a fresh record of $101.43 a barrel. | |
Five-year low | Five-year low |
The latest sign of falling US consumer confidence came from the closely watched Conference Board survey. | The latest sign of falling US consumer confidence came from the closely watched Conference Board survey. |
The outlook for the economy continues to worsen and the risk of a recession continues to increase Conference Board's Lynn Franco | The outlook for the economy continues to worsen and the risk of a recession continues to increase Conference Board's Lynn Franco |
It said consumer sentiment fell to a five-year low in February due to growing recession fears. | It said consumer sentiment fell to a five-year low in February due to growing recession fears. |
At the same time, the number of US homes facing foreclosure rose 57% in January compared with the same month of 2007. | At the same time, the number of US homes facing foreclosure rose 57% in January compared with the same month of 2007. |
Last month the Fed slashed interest rates to 3% as it tried to prevent the US economy falling into recession. | Last month the Fed slashed interest rates to 3% as it tried to prevent the US economy falling into recession. |
"With so few consumers expecting conditions to turnaround in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase," said Lynn Franco, a director of the Conference Board's consumer research centre. | |
US interest rate cuts generally lower the value of the dollar as traders move to currencies with a higher rate of return. |