New Record for the Euro
The euro was soaring to an all-time high against the greenback Thursday as poor results from a major bank pointed to yet more housing-related weakness in the U.S. economy.
The euro was buying $1.4297, up from $1.4189 late in the last session. It had traded as high as $1.4311, a level never before seen, earlier.
"There has been a whole host of bad news, but the single driving factor seems to have been the bad news from Bank of America (BAC)," says Marc Chandler, currency strategist at Brown Brothers Harriman in New York.
Shares of BofA were dipping 3% in recent market action.Elsewhere, the Labor Department said new claims for unemployment insurance jumped much more than expected last week. That only added to downbeat reports this week that included Wednesday's poor housing news and worrisome comments from the Federal Reserve's beige book. Chandler points out that the forerunner for the euro, the Deutsche mark, had been even stronger relative to the dollar during the 1990s, with a high that would equate to roughly $1.457 for today's euro. "So while the euro is at an all-time high, the dollar is not really at record lows," says Chandler. Elsewhere in the foreign-exchange market, the dollar was buying 115.6 Japanese yen, down from 116.7 a day earlier. The British pound was selling for $2.0485, up from $2.0378 previously. Both were being marked higher based on the perceived weakness in the U.S. relative to the British and Japanese economies. The PowerShares DB G10 Currency Harvest (DBV) exchange-traded fund was slipping 0.7%.
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