LONDON, Dec 13: The dollar sank across the board on Friday, sliding to its lowest level in almost three years against the euro amid rising geopolitical concerns, US equity market weakness and uncertainty over US economic policy.
The euro climbed as high as $1.0257 levels not seen since January 2000 before easing back to 1.0236. The single European currency had traded at $1.0184 late on Thursday in New York.
The dollar also fell to 121.66 yen from 122.66 on Thursday.
Gold prices also surged on a weaker dollar and geopolitical concerns, climbing to $332.15 per ounce on the London Bullion Market from 326.40 late on Thursday.
It’s a weak dollar story across the board and the market’s going to run with it for the time being, said Barclays Capital chief currency strategist Brian Martin.
Martin said the US currency’s latest difficulties could not be pinned down to one factor, but instead stemmed from a multitude of concerns.
The risk-reward — against the backdrop of poor news on the (US) economy, concerns regarding the Middle East and elsewhere, and will (US Treasury Secretary-elect) John Snow accept a weaker currency — are clearly leading to a preference to sell dollars, said Martin.
BNP Paribas analyst Iain Stannard said he would not be surprised if the euro had climbed to as high as 1.04 dollars by the end of this year.
Others were similarly negative towards the US unit.
It is hard to see what can make dollar sentiment more positive ahead of the holiday period, warned ABN Amro strategist Aziz McMahon.
And Bank of Tokyo-Mitsubishi currency economist Derek Halpenny said any reduction in Washington’s emphasis on its “strong-dollar” policy would be “quickly picked up” by the market.
The euro was changing hands at 1.0236 dollars from 1.0184 late on Thursday in New York, 124.44 yen (124.88), 0.6443 pounds (0.6442) and 1.4767 Swiss francs (1.4766).
The dollar was being quoted at 121.66 yen (122.66) and 1.4428 Swiss francs (1.4502).
The pound was at $1.5895 (1.5805), 193.32 yen (193.78) and 2.2938 Swiss francs (2.2923).
On the London Bullion Market, the price of an ounce of gold rose to $332.15 from 326.40 late on Thursday.—AFP