Dollar at record low against euro
The dollar slumped to a record low against the euro on Friday after weak US economic data heightened expectations of a fresh cut to US interest rates next week, dealers said.
Historically high oil prices, which could play a part in slowing the US economy, also kept the dollar under pressure, they added.
In early European trade, the euro struck 1.4374 dollars -- the highest level since the single currency`s creation in 1999. It later stood at 1.4370 dollars.
"The housing market and durable goods data from the US yesterday (Thursday) offered further evidence of economic slowdown that is very likely to prompt additional monetary easing by the Federal Reserve," said Derek Halpenny, senior currency economist at The Bank of Tokyo-Mitsubishi in London.
Government data published Thursday showed the US housing market stuck in the mire, with sales of new homes down 23 percent from a year earlier.
On Wednesday, separate data revealed a sharper-than-expected drop in US sales of existing homes.
The figures have added to the near-universal view that the Federal Reserve will next week cut US interest rates from the current level of 4.75 percent in an effort to bolster the economy.
The Fed had last month already slashed rates by a hefty half-point to try to shield the world`s largest economy from housing and credit market woes.
"With rising commodity prices and weak US indicators, the US economy`s slowdown could prompt the beginning of a slowdown in the global economy next year," said Saburo Matsumoto, chief foreign exchange strategist at Sumitomo Trust Bank.
"With the market anticipating that the Fed could cut rates once more by the end of the year, possibly in December, this means that the dollar will be pressured and remain on a falling trend," he added.
Elsewhere, the dollar was also under further pressure from record-breaking oil prices.
Crude futures on Friday surged past 92 dollars for the first time on rising tensions in the oil-rich Middle East following Turkey`s military threat against Kurdish rebels in Iraq and new US sanctions on Iran, dealers said.
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