Dollar hits 12-year low vs yen, euro sets new record

TOKYO, March 13, 2008 (AFP) – The dollar slumped to a 12-year low against the yen and to a new all-time nadir versus the euro in Asian trade Thursday as traders bet on a hefty cut to US interest rates next week, dealers said. It is “only a matter of time before the dollar tests the 100 yen level,” said Yosuke Hosokawa, forex dealer at Chuo Mitsui Trust & Banking. The dollar was bid as low as 100.95 yen in Tokyo morning trade, the lowest level since December 1995 and down sharply from 101.79 yen in New York.

The euro briefly hit 1.5575 dollars — eclipsing its previous record high of 1.5570 set in New York on Wednesday — before easing back to 1.5545 dollars in Tokyo late morning trade.

US President George W. Bush said the weakness of the greenback was “not good tidings” and that he backed a stronger dollar.

But market players said the US currency was likely to remain under pressure.

“The dollar is totally out of market favour now,” said Kenichi Yumoto, vice president of foreign exchange sales at Societe Generale in Tokyo.

He said it was “fully possible” that the dollar would fall below the key 100 yen level.

Investors were reassessing Tuesday’s move by the US Federal Reserve to inject 200 billio