Dollar slips against euro on recession worries

NEW YORK: The dollar on Friday lost ground against the euro and hit a historic low against the yen amid choppy markets gripped by fears of a potential global recession.

The euro was at $1.4398 around 2100 GMT in New York, up from $1.4337 at the same time Thursday.

The euro is "holding up surprisingly well given the ongoing stresses in the European banking system and new question marks about the Greek financial aid package," said Vassili Serebriakov, currency strategist at Wells Fargo Bank.

The dollar stabilized against the Japanese currency after earlier falling to 75.95 yen, its weakest level since World War II.

The greenback fetched 76.50 yen late Friday, compared to 76.52 the prior day.

Samarjit Shankar, at BNY Mellon, highlighted continued "sharp fluctuations" in investor sentiment.

"On the one hand, strong undercurrents of risk aversion have led to the ongoing steady inflows into the Japanese yen," traditionally considered a safe-haven investment in times of uncertainty, he said.

"At the same time however, we are seeing renewed net selling of the US dollar where most of the safe-haven flows were headed earlier this week."

A day after a slew of dim US economic indicators on unemployment, housing and manufacturing, US banks JPMorgan Chase and Wells Fargo lowered their growth forecasts for the world's largest economy.

Mary Nicola, at BNP Paribas, said the euro's rebound against the dollar sprang "from short covering more than anything else," as investors who had speculated on a decline turned to buying to close their positions.

Against another safe-haven currency, the rapidly appreciating Swiss franc, the dollar weakened further, to 0.7849 francs from 0.7936 late Thursday.

But the dollar strengthened against the British pound as the pound fell to $1.6469 from $1.6520 the prior day.

Copyright APP (Associated Press of Pakistan), 2011

Copyright AFP (Agence France-Presse), 2011