CBS Market Watch reports:
Euro rises to record high on dollar
Options barrier falls; Snow reiterates 'strong dollar'
By Emily Church & Osamu Tsukimori
Last Update: 7:22 AM ET Nov. 17, 2004
LONDON (CBS.MW) - The euro hit a record high against the dollar at $1.3047 on Wednesday as a wave of dollar selling in the foreign exchange markets took out options barriers protecting yen and the euro levels.
"There's an overwhelming belief ever since the U.S. elections that the dollar has got quite a way to go down," said Chris Furness, senior currency strategist for 4Cast research in London.
U.S. Treasury Secretary John Snow, traveling in Europe, reiterated Wednesday that a "strong dollar" policy is in the interest of the U.S., but analysts said that the massive U.S. budget and trade deficits are keeping the pressure on the dollar.
Snow also reiterated his comment that the market should set currency rates, which bolstered the view in some corners that a coordinated invention to stem the dollar's decline is unlikely.
"The fundamentals suggest the only way the deficit is cured is with a lower dollar and the U.S. isn't going to stand in the way," Furness added.
The euro was last at $1.3034 after hitting a record $1.3047 in mid-morning trade in London. The markets are looking at $1.33 as the next target for dollar bears, Furness said.
Snow, speaking in London at the Royal Institute of International Affairs, pledged to take action to encouraging higher U.S. savings to curb the U.S. budget deficit, AFX News reported.
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You heard the man. Quit spending money and start saving it.
