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Dollar falls to an all-time low against euro
Published on Fri, Mar 14, 2008 at 08:42, Updated at Fri, Mar 14, 2008 in 
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MARKET MANIA: Speculative buying persisted after the dollar tumbled to an all-time low against the euro.
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Moderation begins? Inflation down to 12.40 pc
Inflation declined for the week ended August 16 following a dip in prices.
New Delhi: US stocks rallied on Thursday after a major credit rating agency said the end to sub-prime related write-downs is in sight, while gold and oil both hit record highs.
Standard & Poor's said write-downs for large financial institutions are likely past the halfway mark, soothing investors' anxiety about the latest credit market fallout and increasing the allure of riskier assets.
The Dow Jones industrial average gained 35.50 points, or 0.29 percent, to 12,145.74. The Standard & Poor's 500 Index increased 6.71 points, or 0.51 percent, to 1,315.48. The Nasdaq Composite Index rose 19.74 points, or 0.88 percent, to 2,263.61.
The rebound in US stock prices came as oil and gold set new records, driven outside by speculative buying by a sour outlook on the US economy. Gold shot past 1,000 US dollars for the first time as oil rose to 111 US dollars a barrel, the seventh straight record in as many trading days, US crude settled at 110.33 USD.
"Oil and gold are commodities, global commodities, that happen to be priced at dollars. So when the dollar loses value, their dollar price rises to compensate, that is on one hand. And on the other, there is an ongoing fear that the United States has lost control of its financial situation. I think that's overstated, but that's the fear, and as a consequence, money is flowing into oil and gold and other commodities," said Milton Ezrati, Market Strategist for Lord Abbett.
US Treasury Secretary Henry Paulson issued a call for US financial institutions to raise capital quickly so they can keep lending and pledged tougher rules for the mortgage industry. Paulson's comments came as the euro surged to new record highs against the US dollar raising fresh concerns about its impact of euro zone growth.
The euro edged up to 1.56 USD, near a lifetime high of 1.5624 USD, according to Reuters data. That was good news to European tourists shopping at New York City's Macy's Department Store, as the euro-to-dollar ratio allowed many to do a little extra spending.
"The prices are a bit the same as in Europe, but because the dollar's cheaper, it's a bit cheaper than in Holland. Big things, like an iPod or something like that, it's a lot cheaper than if you go buy it in the Netherlands or somewhere else in Europe," said Dutch tourist Richard Ver Burgh.
But it will take a lot of foreign spending to boost US retail sales, which fell in February causing extended losses for the US dollar against major global currencies.
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