[NYTr] ANOTHER new low for Yankee buck against euro: lowest since the euro's creation

[All the News That Doesn't Fit]

[They'll be at the Malls for Black Friday, buy buy buy Day, but those
imports won't be as cheap, and the expats are having more and more
trouble living well in Europe. - NYTr]

AFP - Nov 22, 2007
http://www.afp.com/english/news/stories/071122190900.m09os6si.html

Dollar hits new low against euro amid warnings from Europe

LONDON (AFP) - The dollar hit a new record low against the euro on
Thursday, provoking more worries in the eurozone about the impact of
the soaring European currency.

Europe's single currency stuck a record peak of 1.4875 dollars in Asian
trading hours -- the highest level since the euro's creation in 1999.

Later in European trade, the euro stood at 1.4850 dollars, compared
with 1.4854 in New York late on Wednesday. US markets were shut
Thursday owing to the Thanksgiving national holiday.

The dollar also hit an all-time low against the Swiss franc, which is
viewed as a haven in troubled times for the global economy. The US unit
fell to a record low of 1.1005 Swiss francs.

Markets were still digesting Tuesday's downbeat US growth forecasts
from the Federal Reserve. The economic expectations have weighed
heavily on the dollar, despite the Fed insisting it has no plans to cut
US interest rates again in the coming months.

"With investors still exploring the extent and duration of the US
economic downturn, it is no surprise markets are not subscribing to the
idea the Fed is reluctant to cut too far," said Gavin Friend, currency
analyst at Commerzbank.

The Federal Open Market Committee slashed its base federal funds rate
by a half-point to 4.75 percent on September 18. It was the central
bank's first rate cut in four years.

That rate cut, and a subsequent quarter-point reduction to 4.50 percent
on October 31, were taken to ease a credit crunch related to the US
housing slump.

German Chancellor Angela Merkel said Thursday that the euro's record
levels against other major currencies "naturally poses problems" for
exporters, the traditional engine of German growth.

"We are happy of course to have a solid currency. But for exports it
naturally poses problems," Merkel told television news channel N24.

Earlier Thursday, the German head of European plane maker Airbus,
Thomas Enders, said the group might have to take new cost-cutting
measures to counter the euro's rise against the dollar, which he said
had "exceeded tolerable limits."

Airbus expects "enormous losses" from foreign exchange effects, Enders
said.

The dollar was also suffering from growing speculation that overseas
investors may diversify from the US unit and turn increasingly to the
euro.

The euro has "benefited from heightening expectations that Gulf Arab
states and Saudi Arabia will revalue their currencies and introduce a
basket to replace the dollar peg," said NAB Capital strategist John
Kyriakopoulos.

Saudi newspaper al-Riyadh reported that Saudi Arabia may have started
considering a revaluation of its riyal against the dollar ahead of a
meeting of heads of Gulf Arab states in early December.

Elsewhere, market participants were worried the greenback could go into
free-fall against the Japanese unit, even to the 105-yen level, dealers
said.

But they do not expect the Japanese central bank to intervene in the
near term to rein in the stronger yen, which is hurting Japanese
exporters.

"There is no longer any emotional attachment nor aversion against the
yen's appreciation among Japanese politicians and corporate executives
which we saw a few years ago," said Toru Umemoto, chief forex
strategist at Barclays Capital.

The US central bank on Wednesday trimmed back its growth projections
citing weakness in housing and tighter credit conditions.

The Fed projected growth next year in a range of 1.8 to 2.5 percent,
down from a prior forecast of 2.5 to 2.75 percent.

In late European trade Thursday, the euro changed hands at 1.4850
dollars, against 1.4854 late on Wednesday, at 161.10 yen (161.02),
0.7208 pounds (0.7190) and 1.6358 Swiss francs (1.6366).

The dollar stood at 108.49 yen (108.38) and 1.1016 Swiss francs
(1.1016).

The pound was at 2.0600 dollars (2.0650).

In London, the price of gold rose to 803.25 dollars per ounce from 798
dollars late on Wednesday.