Dollar sinks to record low against euro

The dollar fell to a record low below $1.40 against the euro on Thursday, in a delayed reaction to last Tuesday’s more-than expected half a percent cut in US interest rates. The breach of the psychologically key $1.40 level came in early European trade, with the move taking out key stop-loss and option barriers and fuelling a broad-based euro rally. The euro raced to $1.4066, while the single European currency also rose above 70 pence against sterling for the first time in 1-1/2 years.

Dollar weakness intensified in continued reaction to comments from Saudi Arabia’s Central Bank Governor Hamad Saud al-Sayyari who told Reuters on Wednesday that the bank would hold back from matching a U.S. interest rate cut.

The move could herald further weakness as it shows that the dollar’s status as a reserve currency is in question, analysts said.