Dollar slips to new low against euro

BERLIN -- The US dollar hit an all-time low in thin pre-holiday trading yesterday against the euro, which breached the $1.35 mark after a mixed economic report from the US Commerce Department.

After peaking at $1.3506, the euro eased back to $1.3493, up more than a cent from $1.3381 late Wednesday. The previous high of $1.3470 was set Dec. 7.

The 12-nation currency has risen sharply since September, when it was trading for around $1.20, over persistent concerns about the ballooning US trade and budget deficits. With no end to US economic problems in sight, analysts see the trend continuing.

''I can see it finishing the year around $1.35 and we see that it's going to be a steady track upward for the euro/dollar in 2005, finishing the year around $1.40," said Adrian Hughes, a currency strategist with HSBC in London.

The dollar fell against other rivals yesterday. The British pound rose to $1.9201 in late New York trading, up from $1.9144 late Wednesday. The dollar fell to 103.70 Japanese yen from 104.08; 1.1440 Swiss francs from 1.1523; and 1.2334 Canadian dollars from 1.2442.

The euro initially fell against the dollar after its 1999 debut, but it has risen about 63 percent since bottoming out at 82 US cents in October 2000.

The Commerce Department reported that consumer spending grew a modest 0.2 percent in November, slightly weaker than the 0.3 percent that had been forecast by analysts and far short of the 0.8 percent reported for October.

At the same time, incomes grew 0.3 percent in November, more than the 0.2 percent that had been forecast. Still, income growth was weaker than in October, when it hit 0.6 percent.

The Bush administration says it has a ''strong dollar" policy but will let market forces set the currency's strength. Most analysts say the United States is content to let the dollar fall because it makes American exports cheaper.