LONDON, Oct 29, 2007 (AFP) – The dollar plummeted to a record low against the euro Monday, as the European single currency rose to 1.4438 dollars on speculation US interest rates will be lowered again this week, analysts said.
The euro was later trading here at 1.4426 dollars against 1.4391 in New York late on Friday.
Traders are expecting the Fed to cut its key rate by a quarter of a point at a meeting Wednesday, making the dollar less attractive to investors.
“There appears no end in sight to the euro’s strength,” Calyon economist Stuart Bennett said.
“With the Fed set to cut rates further this week, interest rate differentials are likely to weigh even more on euro/dollar.
US policymakers had lowered the Federal Reserve’s benchmark interest rate by half a point to 4.75 percent in mid-September in a bid to shore up the US economy in the midst of a sharp downturn in the housing market.
The Federal Open Market Committee was expected to follow up last month’s cut with a further easing to borrowing costs at the conclusion of a two-day meeting.
“As the odds have risen of another interest rate cut by the Fed on Wednesday of at least 25 basis points, the euro has rallied to a fresh record high ag