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US DOLLAR LOSES GROUND AGAINST EURO SINCE APRIL 2005 November 25, 2006
Bonny Apunyu
(SomaliNet) Since April 2005, the dollar has plunged to its lowest level against the euro amid concerns for the United States (U.S.) economy. The euro surged to $1.3086 against the dollar, with many other currencies following suit.
Meanwhile, Sterling rose almost 1% to $1.93, the yen hit a two-month high and Russia's rouble rose to a seven-year high.
Consequently, analysts have raised concerns about the US economy after the White House downgraded its growth forecasts amid a sharp slowdown in the housing market.
Meanwhile, expectations that the European Central Bank is once again about to raise interest rates gave a lift to the euro.
According to traders, thin trade as a result of the US Thanksgiving holiday might have benefited the euro.
"For the time being, the news flow is favouring the euro. If we close above $1.30 today, the key will be if we reject all of this as a Thanksgiving phenomenon or not," said Ian Gunner, head of foreign exchange research at Mellon Bank.