Euro Hits Year-Low versus Dollar
The euro has fallen to the lowest point against the US currency for more than 12 months, dropping to 1.3856 dollars in early trading as the dollar rose after US senators backed a huge plan to bail out US banks.
The euro on Thursday fell to the lowest point against the dollar for more than 12 months after US senators backed a huge plan to bail out US banks and before the ECB’s latest decision on interest rates.
The European single currency dropped to 1.3856 dollars in early London deals — the lowest level since September 18, 2007.
Later the euro stood at 1.3916 dollars, compared with 1.4009 in New York late on Wednesday.
Against the Japanese currency, the dollar dropped to 105.34 yen from 105.73.
The US Senate resoundingly passed a sweetened 700-billion-dollar Wall Street bailout late on Wednesday, though the House of Representatives had yet to follow suit after killing an earlier bid to avert a world financial meltdown.
The global banking crisis and weak economic growth meanwhile raised pressure on the European Central Bank to cut interest rates on Thursday but economists said it would again probably opt for no change.
Concern that higher wages could stoke inflation “may tie the ECB’s hands for the time being” and ensure its main lending rate stays at 4.25 percent, said UniCredit Markets economist Nikolaus Keis ahead of the ECB meeting.
Christine Li at Economy.com meanwhile said that the troubles at European banks had led to demand for dollars.
“European financial institutions that
The Netherlands has proposed the creation of a European reserve fund that would allow the continent to come to the aid of ailing banks before they fail, the Dutch finance ministry said on Thursday.
“The Netherlands has proposed (to fellow European states) that we think it would be right for all European countries to make a reservation,” spokeswoman Hendrieneke Bolhaar told AFP in The Hague.
The proposal was made last week to the EU Economic and Financial Committee, a group of government officials meeting in preparation for a finance ministers’ gathering in Luxembourg next week, said Bolhaar.
She declined to confirm local media reports that the proposal required each country to contribute three percent of its gross domestic product — totalling 18 billion euros for the Netherlands.
“I cannot go into the details,” said Bolhaar. “We are still discussing the details with other states and partners.”
In London morning trade on Thursday, the euro changed hands at 1.3916 dollars against 1.4009 late Wednesday, at 146.53 yen (148.11), 0.7875 pounds (0.7916) and 1.5732 Swiss francs (1.5771).
The dollar stood at 105.34 yen (105.73) and 1.1312 Swiss francs (1.1257).
The pound was at 1.7633 dollars (1.7693).
On the London Bullion Market, the price of gold fell to 869.75 dollars an ounce from 880 dollars late Wednesday.
Original article: Euro Hits Year-Low versus Dollar From citizen
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