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Last Updated: Friday, 14 March 2008, 11:19 GMT
Dollar slides to fresh euro low
dollar and euros
Traders will be watching next week's US interest rate meeting
The dollar hit another record low against the euro as the US currency was undermined by worries over the credit crisis and the US economy.

At one stage it took $1.5651 to buy a euro, a new record, but the dollar did recover from those early lows.

The dollar also fell below 100 yen for the second day in a row.

Investors are concerned that US authorities will not be able to halt the crisis in the US mortgage market, which is hitting banking confidence.

The dollar recovered slightly against the pound sterling on Friday, with $2.0268 needed to buy one pound after nearly touching $2.04 on Thursday.

"The dollar is still very much in a downtrend and it's hard to see a catalyst for the reversal of that," said Jeremy Stretch, strategist at Rabobank.

"The data has been universally negative for the dollar and until this changes, any rallies are going to be tentative," he added.

Rate cuts?

A report on Thursday that showed a fall in US retail sales for February also upset the market.

Economists say it is likely the US economy will fall into recession and that the Federal Reserve will have to keep cutting interest rates.

That encourages investors to switch to their money into currencies that have a higher rate of return.

The next US interest rate meeting is next week and markets are expecting that the benchmark rate will be cut by 0.75% to 2.25%.

In contrast, investors expect the European Central Bank to keep rates unchanged at 4%.

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