LONDON, 2 December 2004 — The dollar equaled a record low point against the euro and plunged to a 12-year trough against the British pound yesterday when it failed to shake off market concern about the twin US deficits.
The single European currency rose to 1.3306 dollars in late European trading from 1.3277 late on Tuesday in New York. The dollar stood at 102.92 yen compared with 103.00 late Tuesday.
The euro rose to as high as 1.3336 dollars in European trading, equaling the record level reached Monday, before easing slightly. The pound peaked at 1.9314 dollars, its highest level since Sept. 11, 1992, before easing back to 1.9274 dollars in late trade. The pound was boosted by renewed speculation that British interest rates may have to rise again in 2005.
Neither yesterday’s raft of US data, nor the threat of concerted joint action to shore up the dollar by Japan and the euro zone, did anything to help the beleaguered US currency.
The pound got support from a host of factors — ranging from the strength of recent data to upbeat comments from Bank of England officials to predictions from the Organization of Economic Cooperation and Development that British rates may have to rise by as much as 75 basis points next year.
Elsewhere, the morning’s euro zone data came in weaker than expected, with manufacturing PMI faltering to levels which barely indicate growth. Again, the impact was muted, with the euro stalling briefly before steadying above 1.33 dollars.
On the London Bullion Market, the price of an ounce of gold stood at $452.85 against $453.40 late on Tuesday.
Meanwhile, European share prices climbed higher yesterday, with the London FTSE 100 index closing up 0.69 percent at 4,735.7 points. In Frankfurt, the DAX jumped 1.45 percent to 4,186.03 points, while in Paris the CAC 40 gained 1.14 percent at 3,796.71.
In New York, US stocks rose yesterday. The Dow Jones Industrial Average was up 113.06 points, or 1.08 percent, at 10,541.08. The Standard & Poor’s 500 Index was up 12.28 points, or 1.05 percent, at 1,186.10. The technology-laced NASDAQ Composite Index was up 30.58 points, or 1.46 percent, at 2,127.39.
Asian stock markets closed mostly lower yesterday. The Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 115.00 points to 10,784.25. In Seoul, the KOSPI index closed down 1.26 points at 876.80, off a low of 871.13 and a high of 878.91. In Hong Kong, the Hang Seng Index closed up 102.75 points at 14,162.80, the high for the day and off an early low of 13,936.51.
In Sydney, the broader All Ordinaries index closed down 28.5 points at 3,914.3.
In Singapore, the Straits Times Index closed up 11.18 points at 2,038.84 and the All-Singapore Equities index gained 0.87 points to 520.25. The Kuala Lumpur Composite Index lost 2.57 points at 914.62. The Philippine Stock Exchange composite index fell 14.49 points to 1,816.47 after trading between 1,813.04 and 1,830.96.
