Dollar sets another record low vs euro
LONDON (Reuters) - The dollar fell to a new record low against the euro for a sixth successive session on Thursday, as investors braced for more economic reports that could reinforce expectations of another interest rates cut in October.
Economic data this week have provided no respite for the beleaguered dollar and have supported the view the Fed will cut its benchmark rate again after last week's half percentage point easing to 4.75 percent.
Overall, the reports provided evidence of further U.S. housing market decline, deteriorating consumer confidence and a sharper-than-expected fall in durable goods orders.
However, Fed funds futures show the chance of an October rate cut is down to about 84 percent from a high of 92 percent helped by steadier equity markets this week.
Nevertheless traders will look to data due later in the day on sales of new homes in August and weekly jobless claims to see whether they makes a stronger case for the Fed to cut again, which would further hurt the dollar's yield appeal.
"The dollar has weakened across the board and that mood remains...The euro can test $1.4180 if the data is particularly black this afternoon in the U.S., especially the housing numbers," said Roberto Mialich, FX strategist at UniCredit.
However he added that in line with trends seen in recent sessions, a fresh leg higher in euro/dollar would probably be followed by a mild bout of profit-taking.
The euro rose to a new peak of $1.4166 versus the dollar, according to Reuters data, before easing a little to stand at $1.448 by 0959 GMT. It has risen nearly 4 percent against the dollar so far this month.
The dollar index .DXY was down 0.1 percent on the day at 78.396 after sliding to a 15-year low of 78.210 earlier this week, near an all-time low of 78.190.
The U.S. currency edged up 0.1 percent against the broadly weaker yen at 115.59 yen.
MORE BAD U.S. NEWS TO COME?
Economic data remains a focal point for the foreign exchange market after the Fed cited the need to forestall damage to the broader economy from credit troubles when it cut interest rates last week.
U.S. August new home sales are estimated to have fallen to an annualized rate of 830,000 from 870,000 in July.
Analysts said an unexpectedly strong report could prompt a technical rebound in the dollar which some investors felt had been oversold.
Traders still expect the euro to continue its climb, although some are worried that the euro zone economy may be hit by the U.S. subprime mortgage mess and global credit crunch. Continued...
