LONDON, Nov 5: The dollar climbed slightly on Monday but remained anchored near record lows against the euro despite a better-than-expected survey of the US service sector.
In European trade, the euro fell to $1.4472 from $1.4514 late on Friday in New York.
Last Friday, the European single currency had struck an all-time high of $1.4528.
“The mood is still nervous and the dollar is effectively tracking developments in credit markets,” Neil Mackinnon, chief economist at ECU Group, said.
The dollar was close to a 26-year low against the British pound and a 47-year low against the Canadian dollar amid concern about the exposure of major US banks to bad housing loans.
The head of the world’s biggest bank, Citigroup, stepped down over the weekend as the group said it expected losses of up to $11 billion (7.6 billion euros) related to problems in the sub-prime mortgage sector.
Credit worries overshadowed the ISM survey of the services sector for October, which came in at 55.8 points against 54.8 in September and analysts’ forecasts of 54.
Markets were set to pay close attention this week to remarks from Federal Reserve chairman Ben Bernanke to Congress on Thursday after fresh worries about the impact of the US mortgage and credit woes rattled global stock markets last week.
The Fed last week cut its benchmark lending rate by 25 basis points to 4.50 per cent to try to cushion the economy from a housing slump, following a hefty 50-basis-point reduction in September.
Meanwhile the ECB was expected to hold eurozone borrowing costs at 4 per cent on Thursday.
In late European trade on Monday, the euro was changing hands at $1.4472 , against $1.4514 late Friday, at 165.79 yen (166.72), 0.6960 pounds (0.6949) and 1.6692 Swiss francs (1.6744).
The dollar stood at 114.58 yen (114.84) and 1.1537 Swiss francs (1.1533).
