The dollar has pushed higher against pretty much everything except the yen. And the euro has made a series of new record lows and is now opening in New York at $0.8815, down by nearly one full cent from yesterday's close.

"It's very soggy, " said Philip Shaw of

Investec Bank

in London. "The dollar has had a bout of new strength."

Euro zone economic numbers were mixed and gave little reason to support the euro. Indeed, the euro touched its lowest level at $0.8800, a fall of about 25% since its creation at the beginning of 1999. On the positive side,

German unemployment

fell 18,000 to 9.5% of the labor force in July and

industrial orders

rose 0.7%. These solid data highlight the beneficial impact of the falling euro as the export sector is clearly taking advantage of a favorable exchange rate.

On the negative end of the spectrum,

retail sales

for the euro zone fell 0.4% in June, for a modest 1.8% annualized rate of growth.

"There was some good news out of Germany but fundamentals are taking a back seat, " Shaw said.

European Central Bank

member

Tommaso Padoa-Schioppa

has tried to focus the euro problem in the political sphere. The euro zone "is not at the present stage of its development ... able to fill the decisive role that the existence of a single currency should justify," he was quoted as saying in newspaper article in Italy.

The yen stayed flat to the dollar overnight, while continuing to make new highs against the euro. Dollar/yen is opening unchanged at 105.75. The euro/yen cross, which indicates the value of the euro in yen terms, has made yet another new low at 93.05 and is opening in New York only a little above that level at 93.20 yen.

There was some support for the view that the underlying economy in Japan is picking up. The Japanese

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index of leading indicators

was at 57.1% in July, up from June's 55.0%.

Sterling/dollar is suffering in parallel with the euro. The pound is now at $1.4495, half a cent down from the New York close. The euro lost ground to the pound and is opening at 60.80 pence.

The

Confederation of British Industry

reported that retailers are increasingly resorting to price cuts to maintain sales. In a separate report, U.K.

factory output

for July fell 0.3% to produce a year-on-year gain of only 0.7%. These weak data played a role in the pound's fall and strongly suggest that the

Bank of England

will make no change in U.K. interest rates at its meeting today.

The pound "is purely a by-product" of the euro/dollar moves, Shaw said. Quoting a British government spokesman, he said, "it's like a small animal squeezed between two elephants."

The Swiss franc has continued to be beaten up by the dollar. After closing at 1.7435 yesterday, dollar/Swiss is now trading around near-term highs of 1.7555. The euro/Swiss franc rate moved in favor of the euro at 1,5490 as the Swiss currency is particularly subject to aggressive short-term selling.

The Canadian dollar is somewhat affected by the U.S. dollar's strength and has slipped lower to C$1.4780.

The Australian dollar has fallen further to see two-year lows at $0.5640. As expected the

Australian Reserve Bank

did not announce an interest rate increase following its meeting overnight. Australian interest rates remain 25 basis points below U.S. rates and this makes it easy for investors to prefer U.S. assets.

The New Zealand dollar has held at yesterday's lows and is opening at $0.4255.

The South African rand is firmer against the weak euro, but is much softer against the dollar at 7.06. Higher oil prices are also hurting the rand.

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