Source AP ©

Euro hits new record high at USD 1.4162

The euro kept climbing against the dollar Wednesday, hitting another new high at US$1.4162 ahead of a U.S. government report on durable goods demand.

The data from the Commerce Department is considered particularly important, and economists are anticipating a 3.1 percent decline in August durable goods orders, following a solid 5.9 percent advance in July.

The 13-nation currency eased off its new high - its fifth record in as many days - and by midmorning in Europe was trading at US$1.4122, down from US$1.4153 in late New York trading.

A series of negative reports on the U.S. economy, worries about the housing credit crisis and an interest rate cut by the Federal Reserve have contributed to the dollar's decline against the euro - despite reports that the credit woes in the United States are also having a negative effect on economies in Europe.

The strength of the euro has many European businesses concerned, as it makes European-made products more expensive abroad. U.S. exports, however, become more competitive in Europe, which could benefit American manufacturers.

The U.S. Federal Reserve's decision to cut its key interest rate by half a percentage point to 4.75 percent last week came in response to the market turbulence in the fallout from the subprime mortgage crisis, and many analysts see more rate cuts ahead.

Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.

In other currency trading, the British pound slipped against the dollar, to US$2.0144 from US$2.0180. The dollar rose against the Japanese yen to 115.14 from 114.55 in New York last night.

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