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Business

Euro tops 1.50 dollars, gold hits record high

Text by News Wires

Latest update : 2009-11-26

The euro moved back above the 1.50-dollar level with the persistent weakening of the US unit sending the price of gold to another record high, over $1,185 an ounce.

AFP -  The euro jumped back above 1.50 dollars on Wednesday, sending the price of gold to a record high point, analysts said.

In late morning trading here, the European single currency rose to 1.5033 dollars from 1.4959 dollars late in New York on Tuesday.

Against the Japanese currency, the dollar dropped to 87.68 yen from 88.54 yen late on Tuesday.

The price of gold meanwhile struck a record high of 1,180.50 dollars an ounce on the London Bullion Market.

"The euro moved back above the 1.50-dollar level this morning as appetite for risk was given a boost by last night's reassurances from the Fed that rates would remain low for an extended period," said Jane Foley, analyst at online trading firm Forex.com.

The euro is traditionally viewed as a riskier currency than the dollar.

Gold prices meanwhile soared to fresh records on the back of the weak dollar, which makes the precious metal cheaper for buyers using rival currencies, traders said.
  
"If the dollar goes down then the price of gold will automatically rise," said BGC Partners analyst Howard Wheeldon.
  
"Moreover, if the dollar is perceived by bullion markets as likely to continue falling then one can assume that the price of gold will rise in proportion," he added.
  
Fears of a possible spike in inflation is also boosting gold, seen as a "safe-haven" in times of rapidly rising prices.
  
Elsewhere, the British pound rose as keenly-awaited economic data matched analyst forecasts.
  
Britain remains stuck in a record recession, official data showed on Wednesday, but economists forecast a return to growth before the end of the year and ahead of a general election.
  
The economy shrank by 0.3 percent in the third quarter, compared with output in the previous three months, the Office for National Statistics (ONS) said in a statement.
  
This was an improvement on an initial ONS estimate given last month that said the economy had contracted by 0.4 percent between July and September.
  
In London on Wednesday, the euro was changing hands at 1.5033 dollars against 1.4959 dollars late on Tuesday, at 131.81 yen (132.46), 0.9005 pounds (0.9021) and 1.5091 Swiss francs (1.5097).
  
The dollar stood at 87.68 yen (88.54) and 1.0037 Swiss francs (1.0097).
  
The pound was at 1.6694 dollars (1.6576).
  
On the London Bullion Market, the price of gold jumped to 1,179.22 dollars an ounce from 1,170.25 dollars an ounce late on Tuesday.
  

Date created : 2009-11-26

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