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Dollar falls to record euro low | Dollar falls to record euro low |
(about 11 hours later) | |
The US dollar has fallen to a fresh record low against the euro as traders bet that further interest rate cuts will be needed to stem a US recession. | |
The euro rose to $1.5048 after hitting $1.50 on Tuesday for the first time. | |
Data issued on Tuesday, showing a sharp rise in US home foreclosures and another fall in American consumer confidence, weighed on sentiment. | |
Lower US rates tend to send investors in search of other currencies which give a better rate of return. | |
"Inflation - or perhaps more to the point, stagflation - remains a concern for the Fed," said Gary Thomson, an analyst at CMC Markets. | |
Five-year low | Five-year low |
The latest sign of falling US consumer confidence came from the closely-watched Conference Board survey. | |
It said consumer sentiment fell to a five-year low in February because of 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. | |
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 turn around 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. | |