The dollar hit a three-week high against the euro on Monday, boosted by the US currency's gains versus sterling after figures suggested the British housing market may be heading for a downturn. The euro was also hit by short-covering in the dollar and slipped to a four-month low against the yen.
The European currency has been struggling in the past week on speculation that the region's economies may weaken more than expected this year. Meanwhile, the yen held gains against the dollar, supported by an unwinding of risky positions as continuing losses in Japanese stocks kepts investors alert to the possibility of a US recession and its potential effect on other economies.
"There's no change in the momentum to sell the dollar," said Hideki Amikura, a forex manager at Nomura Trust and Banking. "More Nikkei losses are likely to push the dollar/yen lower."
The Nikkei average fell nearly 2.5 per cent in early trade on Monday, having fallen roughly 12 per cent so far this month. The dollar hovered around 106.90 yen, little changed from late last week, when it fell as low as 105.92 yen, its lowest since May 2005.
The euro fell more than 0.3 per cent to $1.4555, its lowest since late December, while sliding around 0.2 per cent to 155.48 yen, its weakest against the Japanese currency since September. The euro was pressured by losses in sterling, which fell as low as $1.9515 and appeared headed towards a 10-month low of $1.9483 hit earlier this month.
Sterling slumped on data from property Web site Rightmove that showed annual house price inflation in England and Wales this month fell to its lowest in around two years, underscoring views that the British housing market may weaken. The euro added to broad losses suffered last week, when European officials said economic growth in the region could slow more than expected this year, although European Central Bank officials said inflation remains a key issue
The European currency has been struggling in the past week on speculation that the region's economies may weaken more than expected this year. Meanwhile, the yen held gains against the dollar, supported by an unwinding of risky positions as continuing losses in Japanese stocks kepts investors alert to the possibility of a US recession and its potential effect on other economies.
"There's no change in the momentum to sell the dollar," said Hideki Amikura, a forex manager at Nomura Trust and Banking. "More Nikkei losses are likely to push the dollar/yen lower."
The Nikkei average fell nearly 2.5 per cent in early trade on Monday, having fallen roughly 12 per cent so far this month. The dollar hovered around 106.90 yen, little changed from late last week, when it fell as low as 105.92 yen, its lowest since May 2005.
The euro fell more than 0.3 per cent to $1.4555, its lowest since late December, while sliding around 0.2 per cent to 155.48 yen, its weakest against the Japanese currency since September. The euro was pressured by losses in sterling, which fell as low as $1.9515 and appeared headed towards a 10-month low of $1.9483 hit earlier this month.
Sterling slumped on data from property Web site Rightmove that showed annual house price inflation in England and Wales this month fell to its lowest in around two years, underscoring views that the British housing market may weaken. The euro added to broad losses suffered last week, when European officials said economic growth in the region could slow more than expected this year, although European Central Bank officials said inflation remains a key issue
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