The dollar weakened to US$1 per euro for the first time in more than three months as an increase in the US jobless rate heightened concern that a slowing expansion will curb investment in the world's biggest economy.
The dollar also fell for an eighth day against the yen, its longest drop in three years. Reports showing consumer confidence slid to its lowest level since 1993 and the economy grew less than expected in the third quarter have driven the dollar down more than 2 percent against the euro and yen in the past two weeks.
US economic "data in the past week have been consistently below expectations," said Rebecca Patterson, a currency strategist at JP Morgan Chase & Co, the fifth-biggest trader in the US$1.2-trillion-a-day foreign exchange market. "That's bad for the dollar."
The US currency weakened to as low as US$1.0003 per euro, the lowest level since July 26. It pared losses to US$0.9968 per euro, weaker than US$0.9903 late Friday, at 4:30pm in New York as a rebound in US stocks boosted demand for dollars. The 12-nation European currency is still about 14 percent below its January 1999 debut level of US$1.16675.
Against the yen, the dollar fell today to Japanese yen 122.17 from Japanese yen 122.48 after the government said the jobless rate rose to 5.7 percent in October from 5.6 percent in September. Patterson said the dollar may weaken to Japanese yen 121.30 next week.
US exporters such as Applied Materials Inc and Honeywell International Inc may benefit from the currency's decline, which makes their products cheaper overseas in euro and yen. Rising exports may trim the record US trade gap, which has in part fueled the dollar's 12 percent slide against the euro and 8 percent decline against thyen this year.
Traders stepped up bets that the Federal Reserve will cut interest rates next week.
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