Dollar weak, gold and oil hit new records amidst loose Fed policy

LONDON, Feb 21, 2008 (AFP) – The dollar dipped against leading currencies on Thursday as dealers worried about slowing economic growth in the United States, analysts said.
In European trading, the euro rose to 1.4746 dollars, from 1.4712 dollars in New York late on Wednesday. Against the Japanese currency, the dollar eased to 108.05 yen from 108.13.

In commodities trading, gold scored a record high 948.59 dollars per ounce, after New York crude oil struck a historic peak of 101.32 dollars per barrel.

Analysts said that the dollar wobbled after the Federal Reserve had slashed its growth forecast on Wednesday, raising expectations of further US interest rate cuts.

“The dollar in general is weak against major currencies … as a feeling of insecurity has returned to markets,” said Kenichi Yumoto, vice president of forex sales and trading at Societe Generale.

On Wednesday, the Fed slashed its US growth forecast for 2008 by half a percentage point to a range of 1.3-2.0 percent due to a housing market slump, tighter credit conditions, financial market turmoil and higher oil prices.

At the same time the minutes of the January Fed meeting — when the key rate was cut by a half point to 3.00 percent — highlighted worries that “the risks of a downturn in the e