MercoPress. South Atlantic News Agency

Dollar Falls to Record Low Against Euro on US Housing Slump

British pound climbed to US$2.0345

The euro hit a new all-time high against the U.S. dollar on Wednesday, climbing as high as US$1.3878 amid speculation that the Federal Reserve will soon cut interest rates.

The 13-nation euro broke through its previous record of US$1.3852, reached in July. By early morning in Europe, it had settled back slightly to US$1.3867. The dollar, which has hovered within a few cents of its record low over recent weeks, has come under new pressure since the U.S. Labor Department issued unexpectedly poor August jobs data on Friday. That report strengthened speculation that the Fed will cut interest rates at its September 18 meeting. A cut from the current rate, 5.25 percent, would be the first reduction in four years. Lower interest rates, used to jump-start the economy, can weaken a currency by giving investors lower returns on investments denominated in it. Most economists expect the Fed to ease credit policy. The debate has shifted to how much -- a quarter or a half percentage point. Fed Chairman Ben Bernanke offered no hints on the Fed's intentions during a speech in Berlin on Tuesday. The dollar was weaker on Wednesday against the British pound, which climbed to US$2.0345 from its level of US$2.0317 in New York late Tuesday. It also fell against the Japanese currency, even as Prime Minister Shinzo Abe announced that he would resign, putting an end to his troubled year-old government. The dollar slid to 113.92 yen from 114.30 yen