Euro at new record high

The euro touched a new record high of $1.4167 against the dollar on speculation that the news from the US will remain soft, allowing the Fed to cut interest rates at its next meeting in October.

The break above $1.4155, the previous high has now opened the way for a move towards the next chart objective of $1.4200, with more resistance seen at $1.4250 according to Financial Mirror charts. The pace of the upmove however, may stall the advance, allowing time for the trend indicators to catch up with the recent rally, a development that may lead to sideways trading once the immediate objective of 1.4200 is reached.

Traders are bracing for home sales data from the US later on in the session, with market participants having forecast a decline in home sales to 825k. Fed Chairman Ben Bernanke is also scheduled to speak.

The euro meanwhile, shrugged reports that the ECB loaned 3.9 billion euros at its emergency rate, renewing concern about credit-market squeeze. Risk appetite was also boosted by news that Bear Stearns Cos. may be close to selling a stake to Warren Buffet or a financial institution.