Dollar plunging to new lows

THE battered dollar was a whisker away from record lows against the euro today, after last night tumbling in the wake of disappointing data that sparked fresh concerns about the US economy.

The greenback was changing hands at 1.3490 against the single currency, within striking distance of the 1.3518 all-time trough hit last night. Against sterling, it was 1.9210, less than three cents away from 12-year lows hit earlier this month. The fall is good news for British travellers jetting off to the US. Thwey will find their pounds going further as they seek bargain buys.

The catalyst for the latest dollar sell-off was news that US new-home sales dived 12% in November - the sharpest decline in more than a decade. US durable goods orders were strong overall in November, but much of the gain was in volatile car sales. The data came amid lingering worries about America's budget and trade deficits.

Although traders said thin trade ahead of Christmas exaggerated price movements, the falls reinforced the belief the dollar's decline would continue. Analysts predicted it would slide to 1.40 against the euro in the first quarter.

The latest slide prompted fresh cries of pain from European policymakers, concerned the euro's strength is hampering eurozone growth.

France's Finance Minister said the world faced 'economic catastrophe' unless the US worked with Europe and Asia on currency movements.

Herve Gaymard said he would seek action at the February meeting of Group of Seven rich countries. 'If we stay as we are, with no co-ordination, one can imagine a catastrophic situation at a global level,' he said.