The unstoppable euro broke through US$1.41 yesterday to a new high and drew renewed calls from French President Nicolas Sarkozy for the European Central Bank to follow the US Federal Reserve and cut interest rates.
Despite the worries of some exporters -- Airbus said if the euro keeps rising it may have to seek new cost savings -- ECB President Jean-Claude Trichet and German Chancellor Angela Merkel stood firm by their calls for the ECB to remain independent.
The currency used by 13 of the EU's countries, which have more than 317 million residents and account for more than 15 percent of global GDP, surged as high as US$1.4119 before falling back to US$1.4056 by afternoon, below the US$$1.4076 it bought in New York on Thursday.
In other trading, the US dollar slid to US$2.0139 against the British pound from US$2.0099 late Thursday. It rose slightly against the Japanese currency to ?115.61 from ?114.44.
The US dollar, which hit parity against the Canadian dollar on Thursday for the first time since 1976, rose slightly to C$1.0016.
Gold rose yesterday and held within striking distance of a 28-year high around US$738 an ounce as purchases from speculators helped the metal defy selling pressure.
Spot gold gained to US$735.40/US$736.20 from US$734.20/US$735.00 late in New York on Thursday, having fallen to an intraday low of US$732.30 an ounce as investors booked profits on a rally that has added more than US$90 an ounce in a little over a month.
Gold hit a peak of US$738.30 an ounce on Thursday -- its best level since January 1980 -- after the dollar tumbled to an all-time low against the euro and record highs crude oil ignited inflation concerns.
"At this point, we are seeing quite strong investor interest in gold," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.
"If the US dollar continues to edge lower against other currencies, then I think you will see a continued support for gold," he said.
Gold is generally seen as a hedge against oil-led inflation.
The US dollar's slide this week came on the back of a decision by the US Federal Reserve to cut its benchmark rate by a bigger-than-expected half a percent to 4.75 percent, a response to market turbulence in the US and elsewhere in the fallout from the subprime mortgage crisis.
"Furthermore, there are widespread expectations that the Fed will trim interest rates further over the coming months," said Howard Archer, the chief UK and European economist for Global Insight. "In contrast, the European Central Bank still retains a clear bias toward raising interest rates further, despite shelving its original plans to act at its September meeting due to the current uncertainty and turmoil in global credit and financial markets."
Lower interest rates, while used to jump-start the economy, can also weaken a currency by giving investors less return on investments denominated in the currency.
The ECB kept its benchmark rate unchanged at 4 percent and the Bank of England is expected to keep its rate steady at 5.75 percent when it meets next month.
The strength of the euro is becoming a political issue, particularly in France, which has repeatedly demanded that the ECB ends its nearly two-year rate hike campaign.
"I don't criticize Trichet," Sarkozy told French television on Thursday.
"But I'm saying: look at what's going on," he said, adding "in the current economic situation, the Fed cuts rates, the ECB doesn't cut them."
Trichet said in a speech on Thursday night that independence is the cornerstone of the bank's monetary policy because it "allows the central bank to pursue its primary objective and to take full responsibility for its action."
Merkel reiterated her stance, saying "even the slightest hint" that the ECB was not independent could endanger the euro's stability.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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