February 27, 2008
|The euro rose to $1.509 after buying $1.50 on Tuesday for the first time. Sterling climbed against the greenback too, reaching almost $2.|
The dollar has fallen to a 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 $1.509 after buying $1.50 on Tuesday for the first time. Sterling climbed against the greenback too, reaching almost $2.
Lower US rates tend to send investors in search of other currencies which give a better rate of return.
The view is that UK and eurozone rates will not fall as much as in the US.
The UK pound traded at $1.988 in morning European trade after a raft of gloomy economic numbers issued on Tuesday.
In addition, Federal Reserve Vice Chairman Donald Kohn suggested that risks of a cooling economy were overshadowing the worries of rising inflation, hinting that US rates will be cut below their current level of 3%.
This article was posted: Wednesday, February 27, 2008 at 8:08 am