Dollar falls to record low against euro

The dollar fell to a record low against the euro on speculation financial-company losses from U.S. subprime-mortgage defaults will grow, prompting the Federal Reserve to cut interest rates for a third time this year.

The U.S. currency dropped to an all-time low of $1.4570 per euro.The yen declined to 166.99 per euro. The U.S. currency fell to $1.0814 against its Canadian counterpart, from $1.0714, and earlier to a 26-year low of $2.0907 against the pound. The dollar also touched a fresh low of CHF 1.1420 against the Swiss franc and during yesterday’s trading, it traded below the equivalent of the DEM high of 1.4545.

Former Fed Chairman Alan Greenspan said the U.S. currency is unlikely to weaken further against the euro, though over the long term it will fall against Asian currencies.

“The euro-U.S. currency adjustment is already finished,” Greenspan said at a forum in Tokyo, according to Richard Tabor Greene, a professor at Kwansei Gakuin University in Osaka who attended the event.

The dollar is 12.6 percent weaker against the euro than a year ago, compared with a 3.2 percent slide against the Japanese yen and a 5.4 percent drop against the Chinese yuan.