Forex View: Euro Expected to Advance Toward High Versus Dollar
Little relief is in sight for the beleaguered dollar.</br></br>Analysts expect the euro this week to advance toward its record high of $1.4968, struck Nov. 23. The dollar likely will weaken against the yen, falling from the current 108-yen level to around 107 yen.</br></br>A whirlwind of disappointing U.S. economic data and record-breaking oil and gold prices has damped hopes for the dollar's resurgence. An early-year rally had been widely expected by many currency analysts.</br></br>"The expected dollar rally is still a way off," said Jim McCormick, head of currency research at Lehman Brothers in London. He pointed to the continued surge in commodity prices, slow growth, and inflation. Investors seeking havens have instead channeled funds into the yen and euro.</br></br>"More people were talking in a lot more optimistic terms about the dollar," said Steve Barrow, chief currency strategist for Bear Stearns in London. That "was based largely on the perception that the U.S. has a lot of bad news priced in. The euro zone has stuff to come." But the dollar could instead have as many as four tumultuous months, he said.