NEW YORK : The US dollar dived to another record low against the euro on Monday amid growing anticipation in the currency market that the US central bank will cut borrowing costs again later this week.
Currency analysts said a widely expected cut in interest rates and concern about US economic growth had pushed an already much-weakened dollar to new depths.
The euro was changing hands at 1.4422 dollars around 2200 GMT, up from 1.4391 dollars late Friday.
In earlier trading, the euro had struck 1.4438 dollars, its highest level since the single currency's creation in 1999. The European currency has rocketed around 14 percent against the dollar in the past 12 months.
The dollar's fortunes dwindled as the Federal Reserve's two-day policy meeting due to open on Tuesday, neared.
Most economists expect the Fed to cut its key short-term federal funds rate on Wednesday.
The central bank slashed the fed funds rate by half-a-percentage point on September 18 to 4.75 percent, hoping it would help offset a credit squeeze and offer a boost to the housing market which has been in a slump since early 2006.
"Foreign exchange carry trades not only thrive on the anticipated reduction in a nation's interest rate vis-a-vis other nations, but also in the resulting decline in the value of that currency ahead of further rate reductions," said CMC Markets' chief forex analyst Ashraf Laidi.
The dollar is coming under heightened pressure ahead of the Fed meeting as traders prefer to buy currencies with higher-yield potential. Low or falling interest rates do not, generally, boost a currency's prospects or appeal.
"With the clock ticking until the all-important Federal Reserve interest rate decision ... on October 31st, traders are quickly upping the ante and betting that the central bank will be cutting rates on Halloween," said Terri Belkas, a currency analyst at Forex Capital Markets.
The US currency has weakened amid uncertainty over US economic growth. Its weakness is helping underpinning US exports, but has made it more expensive for Americans to purchase pricey foreign goods.
Oil and gold prices have also surged strongly in recent weeks, putting further pressure on the US economy which imports a majority of its oil.
The British currency climbed as high as 2.0624 dollars before slipping back to the 2.06 threshold. Its gains came after strong mortgage lending data from the Bank of England dampened the chances of an early interest rate cut.
The Canadian dollar meanwhile struck a 47-year high against the dollar, gaining on the US currency's recent weakness, as well as soaring demand for oil and other natural resources.
The Canadian dollar touched 1.0474 US dollars in earlier trading on Monday.
In late New York trade, the dollar was at 1.1643 Swiss francs, up from 1.1639 Swiss francs late Friday.
The pound was at 2.0629 dollars, up from 2.0522, while the dollar fetched 114.60 yen, up from 114.24 yen late last week. - AFP/de
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