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Greenback at six-month-high on European slowdown

The US dollar surged to a six-month high against the euro on Friday as traders fretted over eurozone economic momentum while some US indicators revealed better-than-expected economic activity.

The euro was quoted at US$1.4685 at 9pm on Friday, down sharply from US$1.4885 late on Thursday. The euro had earlier slumped to US$1.4663, marking its lowest point against the US currency since Feb. 20.

Against the Japanese currency, the dollar was changing hands at ¥110.48, compared with ¥109.57 a day earlier. The dollar had earlier struck ¥110.66, its highest level since January.

The British pound meanwhile hit a two-year low point against the dollar as dealers predicted likely future interest rate cuts from the Bank of England to combat flagging economic growth.

The dollar has been buoyed by growing speculation that the European Central Bank could begin cutting interest rates next year to boost the eurozone economy, which shrank by 0.2 percent in the second quarter.

The greenback also soared against the euro on Friday after a pair of US industrial production indicators raised hopes that the troubled sector was showing signs of recovery, dealers said.
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