Dollar Hovers Near Record Low Against Euro as Snow Rejects Intervention

The euro held near its all-time peak against the dollar in early European trading Monday, slipping to $1.2962 from $1.2973 at Friday's New York close. It had touched $1.2999 at the open, just below the record $1.3005 reached the previous Wednesday. The dollar edged lower against the yen as well, falling to 105.49 from 105.54.

Analysts traced the dollar's weakness to deepening concern about how the United States would finance its deteriorating trade balance and budget deficit. Bank of Tokyo-Mitsubishi economist Derek Halpenny said dollar sentiment remained deeply negative and that markets were likely to test Japan's willingness to limit yen appreciation.

Traders were watching for US capital flow data for September, due Tuesday, and for Friday speeches by European Central Bank President Jean-Claude Trichet and Federal Reserve Chairman Alan Greenspan at a Frankfurt conference.

US Treasury Secretary John Snow, visiting Europe to push for stronger regional growth, brushed aside talk of central bank intervention. He argued that competitive markets were the proper arbiter of currency values and repeated the administration's long-standing verbal backing for a strong dollar. HBOS analyst Mark Miller said Snow was merely "paying lip service" to that position and saw little sign the US was prepared to follow words with action.

Historical summary. TurkishPress restated this AFP wire report, first published in November 2004, in its own words.