Euro sets new record

The euro rose to another new record against the dollar on Monday, hitting US$1.4130 as last week's Federal Reserve interest rate cut continued to weigh on the U.S. currency.

Photo: Euro sets new record

The 13-nation euro rose to US$1.4130 before settling back slightly to US$1.4124 in morning European trading. That compared with a previous peak of US$1.4119 on Friday, and with the US$1.4083 it bought in New York late that day.

The euro surged through the US$1.40 mark for the first time since its debut in 1999, and then kept climbing, after the Fed last week cut its key interest rate by a larger-than-expected half percentage point to 4.75 percent.

The central bank was responding to market turbulence in the U.S. and elsewhere in the fallout from the subprime mortgage crisis, and many analysts expect more cuts to follow.

Given a lack of major economic data due Monday, "traders may now be happy to consolidate around these levels before looking for further gains as the week progresses," said James Hughes, a market analyst at CMC Markets.

Comments scheduled Wednesday by ECB President Jean-Claude Trichet "will be closely watched and assuming the theme here remains bullish, scope for further euro gains cannot be overlooked, and the next big target of US$1.4200 is already well within sight," he said.

Lower interest rates, used to jump-start the economy, can weaken a currency by giving investors less return on investments denominated in the currency.

In other trading Monday, the British pound rose to US$2.0272 from US$2.0200. The dollar also slid to 114.85 Japanese yen from 115.39 yen.