P.s:- Anyone want to hazard a guess at whether John Ashcroft will be putting in an appearance today?
Dollar Falls as Account Worries Return
LONDON (Reuters) - The dollar hit 8-1/2 month lows versus the euro on Thursday as investors resumed selling the U.S. currency due to worries over the country's growing current account deficit, once the presidential election was over.
The re-election of George W. Bush to a second term in the White House did little to change investor sentiment toward the dollar, which has been under pressure for weeks and came within a cent of an all-time low against the euro on Thursday.
The dollar also hit a nine-year low against a basket of currencies on persistent concerns the U.S. economy might not be growing fast enough to attract enough foreign capital to fund the trade gap.
"It's back to the basics," said Trevor Dinmore, foreign exchange strategist at Deutsche Bank in London.
"The event risk has passed and people put on new short-dollar positions (sold dollars)." The euro rose to $1.2855 by 1051 GMT, having climbed from a Wednesday session low of $1.2655. It hit record highs of $1.2927 in February.
The greenback also fell to 1.1909 Swiss francs, matching a recent eight-year low. It also hit a 12-year low against the Canadian dollar.
But it was steady against the yen at 106.28, within half a yen from last week's six-month low.
Oil prices were again in play, following a bounce up in the previous session, underlying concerns for the U.S. economy.
The market was also looking to a U.S. employment report on Friday. U.S. non-farm payrolls are expected to rise by 169,000 in October, compared with a rise of 96,000 in September.
LONG-TERM DETERIORATION?
The dollar's renewed weakness means markets will closely follow Thursday's European Central Bank news conference after an interest rate meeting.
The vast majority expect the ECB to keep rates on hold at 2 percent but investors will focus on whether ECB president Jean- Claude Trichet comments on the rising euro.
So far, European officials have been relatively relaxed about the strengthening euro. But investors are wary of any signs of discomfort after a barrage of verbal criticism from the ECB helped to halt the euro's rise earlier this year.
"The line that has come from the ECB so far is pretty consistent, which is that the impact of high oil prices has been blunted by the stronger euro," said Deutsche's Dinmore.
Other analysts were more hawkish, saying another sign of lack of concern from the ECB could bolster the euro.
"If Trichet does not address euro strength in his speech, euro/dollar will break into the $1.30 handle," BNP Paribas said in a research note.
Victor Constancio, ECB Governing Council member from Portugal, said policymakers would discuss Bush's election victory and the U.S. budget deficit.
The rate decision is due at 1245 GMT and ECB president Jean-Claude Trichet holds a news conferene at 1330 GMT.
CHEAPER HOMES
Sterling also lost ground on Thursday after a downbeat survey on the UK housing market bolstered expectations of slowdown in the sector and highlighted expectations for a no-change UK interest rate decision.
The pound earlier fell to $1.8413 before edging back to $1.8461. It also edged closer to a 10-month low versus the euro, trading at 69.64 pence.
The Halifax bank said in its October house price survey that prices fell 1.1 percent last month, and that the UK housing market appeared to be moving into a slowdown.
This latest evidence of falling UK house prices further dampened expectations for another rise in UK interest rates, following five rate hikes since last November to the current 4.75 percent.
The BoE decision is due at 1200 GMT.
You mean to raise the alert status? Hmmm. Don't know. The tale is in the new unreleased tape, so to speak.
I am sad that he will resign for this next GWB term. John Ashcroft is such a good and honest man and public official.
Did you hear the rumor yesterday that Rudy Guli will be appointed?