Dollar at record low against euro

The US dollar slid to a record low against the euro today as dealers continued to fret over the size of America’s current account deficit.

For the first time since its launch in January 1999, Europe’s single currency broke through the 1.20 US dollar mark.

It was a similar story for the greenback against the pound, with sterling at new five-year highs of 1.72 at one point today.

Despite signs of economic growth in recent weeks, the US dollar has been made less attractive by the country’s current account deficit – the balance between what the country buys in goods and services and what it sells.

Alex Scott, analyst at Seven Investment Management, said: “The dollar is being seen by many traders as something of a one-way bet at the moment.

“There are a number of factors, not least the current account deficit and the massive federal budget deficit.”

Falling export levels mean the US current account deficit is expected to widen to $558bn (€465bn) this year, from $481bn (€401bn) in 2002.