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Dollar falls vs euro as credit jitters persist

Dollar falls vs euro as credit jitters persist
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First Published: Mon, Nov 19 2007. 10 09 AM IST
Updated: Mon, Nov 19 2007. 10 09 AM IST
Tokyo: The dollar fell against the euro on Monday, 19 November, as concerns about the US housing sector and fears of credit-linked losses at financial institutions spreading to the broader economy prompted investors to shun the US currency.
Adding to bearish sentiment for the dollar were weak US economic reports late last week showing the biggest drop in industrial production since January and lower-than-expected foreign investment in US assets in September.
“There are no fundamental reasons to buy the dollar,” said Tsutomu Soma, senior manager of foreign securities at Okasan Securities.
Investors are nervously awaiting book closings by US banks at the end of December that will reveal the extent of their subprime mortgage-related losses, Soma said.
Trading activity was subdued as dealers were reluctant to take fresh positions ahead of market holidays in the United States on Thursday and in Japan on Friday.
The euro climbed 0.1% to $1.4670 edging towards an all-time high of $1.4753 hit on electronic trading platform EBS hit last week.
The dollar was down 0.3% at 110.70 yen but stayed well above a 18-month low of 109.12 yen struck early last week.
The euro dipped 0.1% to 162.35 yen
Tokyo’s Nikkei share average finished the morning session up 0.3% at 15,197.82, helping warm up investor demand for risky yen carry trades, in which investors use low-yielding currencies such as the yen to buy higher-yielding assets elsewhere.
The Australian dollar climbed 0.1% to 99.05 yen while the New Zealand dollar was up 0.2% at 84.01 yen
But sterling fell 0.2% to 227.30 yen after a dovish Bank of England report and weak retail sales data last week fuelled speculation of an early British rate cut with more to follow.
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First Published: Mon, Nov 19 2007. 10 09 AM IST
More Topics: Forex | Euro | Dollar | Yen | Okasan Securities |