The dollar slid to an all-time low against the euro Tuesday amid expectations of higher interest rates outside the U.S.
One euro would purchase $1.3734 -- its highest level ever and up from $1.3622 late Monday.
The greenback also was reaching a 26-year low against the Sterling. One British pound was trading for $2.0265, compared with $2.015 previously. The dollar was weaker against the yen as well, buying 121.9 yen, compared with 123.4 yen previously.
CurrencyShares Euro Trust
, which tracks the value of euros, and the
CurrencyShares British Pound Sterling
, which follows Sterling, were gaining 0.7% and 0.4%, respectively, in recent action.
"Pretty much everyone is in agreement that the
is on hold and will not raise interest rates any time soon," says Jason Schenker, an economist at Wachovia. "That's in contrast to other central banks, where the talk is on
they are going to hike."
As a result, currency investors have expectations of sustained "interest rate differentials" between the dollar and the other major currencies, making nondollar investments more attractive, explains Schenker.
The weakness in the dollar gave precious-metals prices a boost. One ounce of gold was rising $1 to $663.50 an ounce, while silver was up 9 cents to $12.91 an ounce in recent New York futures market action. The price of dollar-denominated assets tends to rise as the value of the U.S. currency decreases.
streetTracks Gold Shares
iShares Silver Trust
, which both hold inventories of bullion, were up 0.6% and 1.1%, respectively.
Also providing further underlying support to gold prices was news that the U.S. Navy was sending a third aircraft carrier group to the Persian Gulf. Some investors purchase gold during times of geopolitical instability, and the addition of extra warships in a region with already rampant conflict may augur a showdown between the U.S. and Iran or other Middle East countries.
As for base metals, prices for copper contracts were off 3 cents at $3.60 a pound. The price was off the psychologically important $3.63 level, which equates to roughly $8,000 a metric ton.
Elsewhere, after the close Monday, aluminum smelter
reported second- quarter earnings of 81 cents a share, in line with Wall Street's estimate. However, sales for the period fell short of expectations, and the stock recently was down 0.2%.
newspaper reported that mining behemoth
may team up with
to make a $40 billion bid for Alcoa.