October 02, 2007	Tuesday	Ramazan 19, 1428

LONDON, Oct 1: The dollar touched a fresh record low against the European single currency on Monday ahead of key US data this week that could open the way to another cut in US interest rates and depress the dollar further.

The euro rose to an all-time high $1.4283 in Asian trading.

In late European trading, the euro was changing hands at $1.4232 compared with $1.4266 in late trading in New York on Friday.

The dollar rose to 115.95 yen, against 114.80 yen late on Friday.

The dollar remained broadly weaker after US manufacturing data fell by slightly more than expected, confirming the general downward trend in the US

economy.

The next indicator of note out of the US will be the non-manufacturing data on Wednesday, while traders are also watching Friday’s US jobs report to see if last month’s surprise fall in jobs is repeated.

Traders were looking ahead to the US non-farm payrolls data for fresh leads on the impact of credit market and housing woes on the economy.

“Although the market has already anticipated poor jobs data, traders are waiting for see if the Fed will reduce interest rates again,” said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.

Market expectations are focused on the next rates decision by the US Federal Reserve Bank on October 31.

The Fed cut its main interest rate by half a percentage point to 4.75 per cent in September. Analysts are betting on a new rate cut next time round to cushion the US economy, but are divided over how big the cut will be.

Analysts on Monday forecast the value of the dollar would to continue to drop.

“We maintain that the dollar will continue to weaken against the euro and the yen next year. Our 12-month forecast is for $1.46 per euro and 110 yen for a dollar,” Sukhjit Nirvan of the Tokyo-Mitsubishi Bank said.

With the euro extending its recent record-breaking streak, traders will also pay careful attention to remarks from top world finance chiefs at a Group of Seven meeting later this month to see if they try to talk up the dollar.

Traders are waiting for the European Central Bank policy meeting on Thursday, when rates are expected to be left unchanged.

In late European trading on Monday, the euro was changing hands at $1.4232, against $1.4266 late on Friday, 164.97 yen (163.82), 0.6964 pounds (0.6968) and 1.6625 Swiss francs (1.6601).—AFP