The dollar fell to a new low against the euro yesterday as US Treasury Secretary Mr John Snow ruled out co-ordinated intervention to stem the recent fall in the US currency.
The US currency fell as low as $1.3047 against the euro, a level for European currencies last seen in 1996. Last night it was trading at $1.3032.
Unlike recent dollar declines which have been concentrated against the euro, the greenback's value also dropped against most Asian currencies. It fell by more than 1 per cent against the Japanese yen and by smaller amounts to other regional currencies.
Yesterday's moves came as figures showed US industrial output rose 0.7 per cent in October, capacity utilisation also climbed and the annual rate of inflation reached 3.2 per cent.
But the currency marketes ignored these strong US economic figures and instead concentrated on Mr Snow's comments and the meeting of finance ministers from the "Group of 20" rich and emerging economies scheduled for this weekend.
Speaking in London, Mr Snow reiterated the US administration's "strong dollar" policy but rejected the case for co-ordinated action to reverse recent currency movements.
Mr Avinash Persaud, investment director at GAM, said Mr Snow's comments had changed market perceptions of the future path of the dollar. "There is a final acceptance in currency markets that the White House has no interest in supporting the dollar."
With the dollar falling against a range of currencies, European Central Bank officials yesterday played down the damage that the euro's strength is causing the euro-zone's export-led recovery.
Mr Nicholas Garganas, a member of the ECB's governing council, said: "Export growth is mainly dependent on demand conditions abroad and these are still favourable."
Oil prices abruptly ended their losing streak yesterday, jumping nearly $1 after a US government report showed heating oil stockpiles down 16 per cent from last year ahead of winter.
US light crude settled up 73 cents to $46.84 a barrel after breaking briefly over $47, halting a slide that has cut nearly $10 off the price since late October's record high of $55.67 a barrel. London Brent crude was up 47 cents at $42.76. - (Financial Times Service/Reuters)
