Tumbling US dollar sends oil, gold skyward
- Source: Global Times
- [01:46 October 15 2009]
- Comments
A Kuwaiti jeweler arranges golden bracelets Wednesday in his shop window in downtown Kuwait City. The price of gold leapt to a record peak above $1,070 per ounce on the London Bullion Market as the dollar slid in value against the euro. Photo: AFP
The US dollar's slump to a 14-month low against the euro Wednesday further squeezed investors into other commodities, pushing the price of gold to a record high and crude oil futures above $75 for the first time in a year.
The euro struck $1.49 – the highest since August 2008 – on an increased appetite for currencies seen as less risky than the greenback and on prospects for super-low US interest rates amid rising economic confidence, analysts said.
"I think $1.50 is the next target (for the euro) and we will probably see it very soon," said GFT Global Markets analyst David Morrison.
He added that traders also believed that the US Federal Reserve would keep US interest rates close to zero for the foreseeable future.
"Also, whatever the Fed and the US Treasury say, the market believes that the US administration is happy to see the dollar weaken. They just want to make sure it does it gradually," Morrison said.
