Dollar hits new low versus euro

Concerns about the U.S. banking sector drive greenback to a record low against the 15-nation euro.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Lara Moscrip, contributing writer

Do you feel your money is safe at your bank?
  • Yes
  • No
  • Unsure

NEW YORK ( -- The dollar sank to a new all-time low against the euro Tuesday as concerns about the health of the U.S. banking sector and economy deepened. But the dollar bounced back slightly after Federal Reserve Chairman Ben Bernanke acknowledged that the dollar's weakness is a concern.

The 15-nation euro rose as high as $1.6038 in European trading, breaking through its previous high of $1.6018 set April 22. It has pulled back to $1.5880.

The British pound fell slightly against the dollar, buying $2.0018 from $2.0086.

The greenback gained slightly against the Japanese yen, moving to ¥104.86 from ¥103.59.

Bernanke told the Senate Banking Committee Tuesday morning that the dollar's fall has "contributed somewhat" to the increase in oil prices and has put "upward pressure" on business costs and consumer prices.

His comments had a calming effect on the markets and gave a boost to the dollar, according to Stephen Malyon, currency strategist at Scotia Capital.

However, Malyon thinks the boost is temporary and believes the dollar will remain under pressure from the crumbling housing market well beyond the second half of this year.

"We think the dollar is going to remain under some pressure for the next couple of quarters," Malyon said.

Fears about the volatile mortgage giants
Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), along with the government seizure of regional mortgage lender IndyMac (IMB) on Friday, have reignited credit worries.

Investors regard the bank failures, credit concerns and the crumbling housing market as a reason to bet against the dollar, according to Dustin Reid, currency strategist with ABN AMRO. He expects the situation will remain the same for the next few months.

"The short term look for the dollar now is pretty bearish. The market will need to recover from this risk aversion before we get a rebound," Reid said.

Shares of big banks Washington Mutual (WM, Fortune 500) and National City (NCC, Fortune 500) plummeted in Monday trading and later issued statements that they had enough capital to avoid the fate of IndyMac.

Bonds: Treasury prices rallied for a second consecutive day Tuesday after Federal Reserve Chairman Ben Bernanke gave a grim economic outlook. The benchmark 10-year note rose 10/32 to 100 15/32 and yielded 3.82%, down from 3.88% late Monday. (Full story)

Oil: Oil prices fell on Tuesday as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke. Light, sweet crude fell $6.44 to settle at $138.74 a barrel in trading on the New York Mercantile Exchange. (Full storyTo top of page

Track 17 major currencies

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.