Euro scores record highs against dollar, sterling

The euro hit record peaks against the dollar and sterling on Thursday, boosted by favourable interest rate differentials ahead of monetary policy decisions in the eurozone and Britain, analysts said.In morning deals, the euro soared as high as 1.5913 dollars, which beat the previous pinnacle of 1.5905 dollars set on March 17.Later on Thursday at 1145 GMT, the ECB was widely expected to hold eurozone interest rates at 4.00 percent, where they have stood since last June.In contrast, the US Federal Reserve has slashed its key Fed funds rate by three percentage points to 2.25 percent since September as it battles a potential recession and a severe subprime housing slump.Currency traders generally prefer to invest in countries where interest rates are expected to trend higher, so they can potentially reap higher returns."The ECB is expected to leave rates unchanged at 4.00 percent today and keep the door shut for possible rate cuts in the foreseeable future," Commerzbank economist Gavin Friend said in London on Thursday."The notable rise of the inflation rate and the resulting risk of second round effects are currently making rate cuts impossible, in particular as eurozone economic data-above all from Germany-remains relatively robust."The greenback fell as investors bet on further US interest rate cuts "in response to re-emerging worries about the depth and duration of the US recession," noted NAB Capital strategist John Kyriakopoulos.The International Monetary Fund warned Wednesday that the United States economy would see growth in 2008 of just 0.5 percent and said a "mild" recession appeared inevitable.Meanwhile on Thursday, the European single currency also hit a record high against the British pound ahead of an interest rate decision from the Bank of England at 1100 GMT.The euro surged to a historic peak at 0.80290 pounds.Most economists expect the BoE to cut rates as the British central bank monitors the fallout from the ongoing global squeeze on credit, but the decision could be a close call because of above-target inflation.Investors were also speculating on the chances of coordinated action by finance chiefs from the Group of Seven (G7) industrialised nations at a meeting on Friday to tackle global credit problems.But some analysts warned that anyone hoping for concrete joint action from the meeting would probably be disappointed."The G7 will likely be a non-event. They won't come up with a new policy coordination to crack the weak dollar," said Tomoko Fujii, head of economic strategy at Bank of America in Tokyo.Elsewhere, China allowed the yuan to appreciate beyond 7.0 to the dollar for the first time since a peg with the US currency was scrapped nearly three years ago, while the Singapore dollar also hit an all-time high against the US unit.In London on Thursday, the euro changed hands at 1.5877 dollars against 1.5735 late on Wednesday, at 159.56 yen (161.22), 0.8024 pounds (0.7985) and 1.5746 Swiss francs (1.5915).The dollar stood at 100.51 yen (102.43) and 0.9920 Swiss francs (1.0114).The pound was at 1.9783 dollars (1.9712).On the London Bullion Market, the price of gold rose to 933.45 dollars per ounce from 917 dollars late on Wednesday.
http://www.breitbart.com/article.php?id=080410105142.k9njxgzw&show_article=1

As in the days of Noah...