Sun, Nov 04, 2007 - Page 10 News List

Dollar falls to fresh low as traders fret about economy

AFP AND BLOOMBERG , NEW YORK

The US dollar dived to a fresh record low against the euro on Friday as foreign exchange speculators appeared to shrug off an upbeat economic report that revealed a surprisingly strong surge in US job creation.

The already ailing US dollar tumbled to a fresh low point against the euro in Friday afternoon trading as traders continued to fret about US economic prospects amid a housing slump and credit woes.

The euro was switching hands at US$1.4504 in afternoon trading, up from US$1.4422 late on Thursday. The euro, however, had surged to a record US$1.4528 in earlier trading on Friday.

The US dollar gained some ground against the yen, rising to ?114.65 in afternoon deals, compared with ?114.54 a day earlier.

But the dollar fell against other currencies including the British pound and Canadian dollar, continuing a months-long decline.

The greenback fell despite a government report showing US employment growth accelerated last month as 166,000 new jobs were created. The survey suggested the US economy is weathering housing and credit woes.

The British currency rose to US$2.0888 at 7:05pm GMT from US$2.0793 on Thursday.

The Canadian dollar meanwhile spiked nearly two percent to a record high of US$1.0723.

In afternoon trading, the dollar was at 1.1529 Swiss francs, down from SF1.1575 a day earlier.

Asian currencies pared gains made earlier in the week as investors reduced holdings of emerging-market assets on speculation subprime-mortgage losses will hinder global economic growth.

Malaysia's ringgit snapped two days of gains on Friday and South Korea's won declined for a second day after ratings cuts on Citigroup Inc and Bank of America Corp increased concern credit-market losses will erode earnings of US banks. Five of the 10 most active currencies in Asia closed the week higher, the won was little changed and four declined.

The ringgit closed the week 0.1 percent higher at 3.3430 against the US dollar, after a 0.4 percent decline on Friday, data compiled by Bloomberg show. That was its eighth weekly gain.

The won ended the week little changed after falling as much as 0.6 percent on Friday to 909.00 before closing at 907.10, Seoul Money Brokerage Services Ltd said.

The Morgan Stanley Capital International Asia-Pacific Index dropped 1.6 percent on Friday after analysts at CIBC World Markets said investors should sell shares of Citigroup, the largest US bank, because the company may not be able to pay its dividend unless it sells assets.

The South Korean won declined the most in three weeks against the US dollar as the benchmark KOSPI index of shares slid as much as 2.4 percent.

The New Taiwan dollar was little changed against the US currency at NT$32.390, Taipei Forex Inc said.

Indonesia's rupiah fell 0.1 percent to 9,133 per US dollar in the week as investors sold emerging market assets. Record crude oil prices may also spur demand for US dollars among importers, said Masahiro Gao at PT Bank Mizuho Indonesia.

Singapore's dollar was little changed in the week at S$1.4501, and Thailand's baht gained 0.3 percent to 34 in onshore trading.

Financial markets in the Philippines were closed for a public holiday.

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