Dollar hits record low vs euro, yen slips back

Dollar hits record low vs euro, yen slips back

Tokyo: The dollar hit a record low against the euro and a basket of currencies on Thursday as expectations for a further Federal Reserve interest rate cut were reinforced by the central bank’s projection that US economic growth will slow next year.

But the dollar fared better against the yen, pushing up from a 2-year low hit the previous day. The yen’s rally on risk aversion ran out of steam as Japanese shares held their ground despite a slide in US equities on Wednesday.

Traders said further sharp currency moves were likely in the near term because of thin liquidity, as US markets are closed on Thursday for the Thanksgiving holiday and may be lightly staffed on Friday. Japanese financial markets will be closed on Friday for a national holiday.

“The market is now closely watching what the authorities in Japan and Europe have to say about their rising currencies as the yen approaches the psychologically key 105 yen (against the dollar) and the euro nears $1.50," said Kengo Suzuki, a currency strategist at Shinko Securities.

The dollar rose to 108.99 yen pulling away from the 2-year low of 108.25 yen hit on electronic trading platform EBS on Wednesday.

Buying by Japanese institutional investors helped boost the dollar versus the yen, traders said.

The euro hit a record high of $1.4873 on EBS earlier in the day. It later trimmed its gains to stand at $1.4860 steady from late US trading.

The dollar index, which measures the dollar’s value against a basket of major currencies, hit a record low of 74.916.

The dollar remained close to an all-time low struck earlier against the Swiss franc at 1.1006 francs on EBS.