Dollar Drops to Record Low Against Euro as Credit Losses Erode U.S. Growth

[marmar]

Dollar Falls to Record Versus Euro; Credit Woes May Damp Growth

By Bo Nielsen and Agnes Lovasz

July 15 (Bloomberg) -- The dollar declined to a record low against the euro on speculation Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson will say credit- market losses are hurting U.S. economic growth.

The currency also weakened to the lowest level in more than a month against the yen and to a 25-year low versus the Australian dollar on concern confidence in the debt of Fannie Mae and Freddie Mac will diminish even after the U.S. government pledged support for the two-largest buyers of home loans. The pound surpassed $2 for the first time since July 1 after U.K. inflation quickened to the fastest pace in at least 11 years.

``The markets are reacting negatively to the renewed credit crisis in the U.S., and that's hurting the dollar across the board,'' said Roberto Mialich, a Milan-based currency strategist at Unicredit Markets & Investment Banking, a unit of Italy's largest lender. ``The market is speculating that Bernanke will offer a gloomy outlook for the U.S. economy.''

The dollar fell 0.5 percent to $1.5993 per euro at 8:35 a.m. in New York, from $1.5908 yesterday, and touched $1.6038, the weakest level since the 15-nation currency's debut in 1999. The U.S. currency dropped 1.4 percent to 104.63 yen, from 106.14 yesterday, and reached 104.55, the lowest since June 9. Japan's currency increased 0.9 percent to 167.29 per euro, from 168.89 yesterday, when it weakened to 169.75, the all-time low.

The U.S. currency has given up all the gains made versus the euro since July 3, when European Central Bank President Jean-Claude Trichet said he has ``no bias'' on future interest- rate moves. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aqlTJ7mMYM1I&refer=home

[SpiralHawk]

1. The putrid fruit of republiconomics

[marmar]

2. Is that one of the deadly salmonella-laced tomatoes?

:scared:

[SpiralHawk]

3. That's your basic putrid persimmon

Republiconomics leaves no fruit unspoiled.