Dollar hits record low against euro after G7 meeting

Officials from the CA Sri Lanka overseas chapters

TOKYO, Oct 22, 2007 (AFP) – The dollar suffered fresh losses in Asian trade Monday, hitting a record low against the euro after US share prices slumped and world finance chiefs refrained from voicing increased concern about currencies. Finance ministers and central bankers from the Group of Seven industrialised nations on Friday only reiterated that exchange rates should reflect economic fundamentals, which markets took as a green light to sell the dollar.

The euro rose to as high as 1.4347 dollars in early Asian trading, topping a previous all-time high of 1.4319 last week. It later stood at 1.4329.

The dollar sank to 113.67 yen from 114.53 in New York late Friday, as the Wall Street slump prompted investors to unwind risky “carry trades” — when speculators sell the Japanese unit to buy higher-yielding assets.

The G7 ministers called on China to allow its currency to appreciate more quickly but refrained from trying to talk up the ailing greenback.

Instead the statement reiterated that exchange rates “should reflect economic fundamentals” and that excess volatility is undesirable for economic growth.
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The G7 statement “gave the green light to further dollar depreciation,” noted analysts at Barclays Capital.

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