Dollar Slumps Broadly, More Losses Seen [View All]

[UpInArms]

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20041022&ID=4047609

NEW YORK (Reuters) - The dollar stumbled on Friday as persistent concerns over the U.S. economy and comments throughout the week from European Central Bank and Federal Reserve officials allowed the currency no respite.

Late in the session, traders took advantage of thin market conditions and sent the dollar to fresh eight-month lows against the euro, an 8-year low versus the Swiss franc and a 12-year trough against the Canadian dollar.

Traders cited the confluence of mixed U.S. economic data, a record trade deficit and waning capital inflows as reasons to sell the currency into next week.

The euro's sudden rise this week against the dollar led some analysts to suspect the U.S. currency could rebound a bit. But market participants still see the dollar under pressure next week, awaiting the initial reading of third-quarter gross domestic product.

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Analysts anticipate some short-covering next week, as dealers temporarily buy back dollars to cover their bets the U.S. currency will weaken even further, particularly with the U.S. presidential election and the October employment report about two weeks away.

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