Desperate dollar 'set for euro parity'
THE dollar sell-off is gathering momentum, with some experts predicting parity between the US currency and the euro by year-end.
On the foreign exchanges on Tuesday, the dollar slipped to its lowest level in 16 months against the euro, following new data showing rising French consumer confidence, higher euroland business confidence and a downward unemployment revision. The euro is now worth 94.5 US cents.
With London markets closed, the pound weakened against the euro and is now worth 64.30p, though it strengthened against the US currency. The euro has gained 5% against sterling since the start of the year and 6% against the dollar.
The pound is under pressure, despite Britain's Engineering Employers Federation reporting that the engineers' long recession may be drawing to a close.
In Tokyo, the Bank of Japan supported the dollar, lifting it by one yen to 123.35 yen. With the dollar under pressure, the gold price climbed $2 and was trading close to $330 an ounce in New York.
Hans-Werner Sinn, who heads Germany's Ifo institute, said he expected to see dollar-yen parity by year-end. European officials sought to calm concern about the euro's rising value. German finance minister Hans Eichel said it should pose 'no short-term problems for German exporters'.
The European Commission's senior monetary official, Pedro Solbe, said there was no reason why euroland could not live with a euro of more than 95 cents.
