Euro nears 1.38 dollars; pound hits new 26-yr peak
Afp, London
The euro neared a record dollar high on Monday, while the British pound struck the highest level since 1981 against the struggling greenback amid ongoing concerns over the US economy, dealers said. The European single currency rose to 1.3794 dollars in early European trading, compared with 1.3781 late in New York on Friday. The pound surged to a 26-year high of 2.0398 dollars as the British currency drew support from the prospect of rising interest rates in the coming months, dealers said. The euro had shot to a record high 1.3814 dollars on Friday, against a backdrop of higher eurozone interest rates and worries over the health of the United States economy, analysts said. On Monday, overall trade was somewhat muted with markets in Japan closed on Monday for a public holiday. The main focus this week will be on the release of June US inflation data on Wednesday and US Federal Reserve chairman Ben Bernanke's semi-annual testimony to congress on Wednesday and Thursday. Markets will be keen to hear Bernanke's assessment of the sub-prime sector's troubles and whether there is any major change in the Fed's inflation outlook. "We do not think the interest rate news this week is likely to be very negative for the dollar, but with sentiment quite bearish, investors are likely to sell the dollar upon any rallies," said Barclays Capital analysts.
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