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Dollar slides to fresh euro low Dollar slides to fresh euro low
(19 minutes later)
The dollar fell to a new record low against the euro, amid continued fears over the state of the US economy and worsening credit conditions. The dollar has fallen to a new record low against the euro, amid continued fears over the state of the US economy and worsening credit conditions.
The US Federal Reserve has cut its discount lending rate, but the move failed to buoy investor confidence. The US Federal Reserve has cut a key lending rate, but the move failed to buoy investor confidence.
At one stage on Monday morning it took $1.5904 to buy a euro.At one stage on Monday morning it took $1.5904 to buy a euro.
With giant investment bank Bear Stearns needing emergency funding investors are concerned other banks may follow suit, as the credit crunch claims casualties. With giant investment bank Bear Stearns needing emergency rescue, investors are concerned other banks may follow suit, as the credit crunch claims casualties.
On Sunday the US Central Bank lowered the discount rate, its lending rate tofinancial institutions, to 3.25% from 3.5%. 'Alarming'
JP Morgan Chase is to acquire Bear Stearns, Wall Street's fifth-largest investment bank, for $2 a share - a fraction of its previous value.
"This is not the kind of help you want to see. Bear Stearns getting sold at $2 is alarming," said Peter Boockvar, equity strategist at Miller Tabak in New York.
"When you see the Fed relying on tools that haven't been used since the Depression, it's alarming," he said.
On Sunday, the US Central Bank lowered the discount rate - the rate given to financial institutions - to 3.25% from 3.5%.
As the greenback continues to weaken, investors are opting to place their money in commodities, contributing to the sharp rise in oil prices.As the greenback continues to weaken, investors are opting to place their money in commodities, contributing to the sharp rise in oil prices.
Sweet crude oil climbed to a new high approaching $112 a barrel.Sweet crude oil climbed to a new high approaching $112 a barrel.
"Gold will be the main beneficiary [of the falling dollar] as a hedge against global risk," said Australia & New Zealand Bank senior commodities analyst Mark Pervan.
The dollar also weakened to 95.72 yen, its lowest since August 1995.