Dollar at record low against euro
LONDON, England (Reuters) -- The dollar fell to a record low against the euro on Tuesday as its euphoria over the weekend capture of former Iraqi leader Saddam Hussein gave way to concerns about the widening U.S. current account deficit.
Figures showing the extent of the U.S. current account gap for the third quarter will be released later in the session, as well as consumer prices data which will provide clues on how long U.S. interest rates are likely to stay low.
"Financial markets were already discounting risk factors related to Iraq so (the capture) didn't have a lasting effect,'' said Mary Davis, global foreign exchange strategist at CSFB.
"As far as currencies are concerned the dollar is under pressure from a combination of the level of the current account deficit and monetary policy gap between the U.S. and Europe.''
The euro rose to its latest record high of $1.2361, according to Reuters data, bringing its gains this year to nearly 18 percent.
By 1045 GMT it was holding just below the peak at $1.2345, around a third of a percent higher from late New York levels.
The single currency was also up against the yen at 132.86 yen, sterling and the Swiss franc.
The greenback fell to a six-year low against the Australian dollar and was trading around a seven-year low against a basket of currencies.
It was steady against the yen, supported by wariness that the Japanese authorities would step in to stop the U.S. currency's descent. It was trading around 107.62 yen, around one yen above a three-year low set last week.
The market had rapidly concluded the capture of the former Iraqi leader did not signify an end to geopolitical tensions and swiftly turned its attention to the old theme of twin U.S. deficits which has sent the dollar lower this year.
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