Euro dips under 1.48 dollars

LONDON — The euro fell below 1.48 dollars on Wednesday while the yen gained ground as fresh worries over the outlook for the global economy prompted buying of "safe-haven" units, dealers said.

Investors were also waiting for fresh US data due out later in the day, including durable goods orders and new home sales.

In London morning deals, the European single currency slipped to 1.4798 dollars, from 1.4810 dollars late on Tuesday.

Against the Japanese currency, the dollar sank to 91.06 yen from 91.77 yen late on Tuesday in New York.

A disappointing US consumer sentiment report on Tuesday sparked concerns that the world's largest economy may not be recovering as quickly as hoped, reducing demand for higher-risk but also higher-yielding currencies like the euro.



"The euro will likely keep falling for now because share markets are bearish and unstable again, pushing currency dealers back into risk-aversion mode," Yuichiro Harada, a dealer at Mizuho Corporate Bank, told Dow Jones Newswires.

Other high-yielding units also declined against the yen. These currencies usually weaken when risk appetite falters.

"The market mood has definitely soured this week and there is little sign of any turnaround. This is good for the dollar but bad for risk trades," Calyon analyst Mitul Kotecha wrote in a note to clients.

Investors are worried that a premature hike in global interest rates may hamper a nascent recovery at a time when major economies are still limping out of recession, dealers said.

Traders were jittery ahead of monetary policy meetings in Malaysia, Norway and New Zealand this week, following a recent rate hike in Australia that fuelled speculation that other central banks may follow suit.

Norges Bank was widely expected to raise rates when it meets later in the day, as its economy recovers faster than other European nations due to brisk global demand for its commodities.

The Reserve Bank of India kept interest rates on hold Tuesday but began unwinding extraordinary stimulus measures by requesting lenders to set aside more bonds as reserves in order to restrain credit.

In London on Wednesday, the euro was changing hands at 1.4798 dollars against 1.4810 dollars late on Tuesday, at 134.67 yen (135.89), 0.9053 pounds (0.9039) and 1.5121 Swiss francs (1.5125).

The dollar stood at 91.06 yen (91.77) and 1.0224 Swiss francs (1.0210).

The pound was at 1.6337 dollars (1.6380).

On the London Bullion Market, the price of gold fell to 1,034.15 dollars an ounce from 1,036.50 dollars an ounce late on Tuesday.