Dollar slides to new record low against euro, gold 825 dollars after rate cut

LONDON, Nov 7, 2007 (AFP) – The dollar on Wednesday tumbled to a fresh historic low against the euro, as a Chinese official suggested China may diversify its reserves away from the US unit, analysts said. The greenback was also pressured by the prospect of yet another cut to US interest rates, dealers said.

The euro raced to an all-time high of 1.4704 dollars in early European trade. It later stood at 1.4691 dollars, which compared with 1.4555 in New York late on Tuesday.

Against the British pound, the dollar hit a new 26-year low. Sterling hit 2.10 dollars, the highest level since 1981.

The price of gold meanwhile breached 845 dollars an ounce to reach the highest level since 1980 and within touching distance of its all-time peak of 850 dollars an ounce.

“With this weaker dollar we will see it (gold) push through 850 dollars and even 860 dollars today,” said Ben Coleman, commodities trader at Trade Index. A weak dollar makes commodities priced in the US unit cheaper for buyers using stronger currencies.

The dollar was meanwhile further hurt by comments made by the vice chairman of China’s national parliament, analysts said.

Cheng Siwei reportedly said at a conference in Chi