Thin trading sinks dollar
Euro climbs to record against US currency, yen
NEW YORK -- The dollar slipped to a record low yesterday against the euro in thin, volatile holiday trading.
The euro peaked at $1.3667 before easing slightly to $1.3648 in late New York trading, above Wednesday's late rate of $1.3598 and the previous record set Wednesday of $1.3646.
The euro also reached a record high against the Japanese yen of 141.61 in Asian trading yesterday, then eased back to 140.49 yen in late trading in New York.
Trading volume during the Christmas and New Year's holidays has been light, causing exaggerated currency swings in foreign exchange markets. The low liquidity has encouraged traders to aim for record highs and lows, said Greg Niebank, a trader at CMC Group in New York.
''When you're close to highs and close to lows, they do get targeted," Niebank said.
In late New York trading yesterday, the dollar posted losses against other rival currencies. The US currency fell to 102.97 yen from 103.83 late Wednesday; 1.1311 Swiss francs from 1.1345; and 1.2036 Canadian dollars from 1.2131. The British pound was stronger at $1.9249, up from $1.9172 late Wednesday.
The growing US trade and budget deficits have weighed down the dollar, and many analysts predict the dollar will keep weakening into the new year, with the euro likely hitting $1.40 or higher by the end of 2005.
The 12-nation euro initially fell against the dollar after its 1999 debut, but it has risen about 66 percent since bottoming out at 82 US cents in October 2000.
Though Washington professes a ''strong dollar" policy, most analysts believe the US government is content to see the dollar fall because it makes US exports cheaper and can help export-dependent sectors of the economy.
European officials fear the stronger euro could hurt their region's economy by making exports more expensive. On the other hand, it helps cool inflation by making imports cheaper.
