Dollar touches fresh lows

The dollar hit a record low against the euro for the third session on Monday on concerns that the troubles in the housing sector could crimp economic growth and trigger more interest rate cuts in United States.
Trade was light with market attention shifting to housing and consumer confidence data due on Tuesday.
Investors are worried that additional monetary easing after last Tuesday's half-percentage-point rate cut by the Federal Reserve could further erode the dollar's appeal against higher yielding currencies such as the euro.
"We have interest rate differentials and growth differentials working against the dollar and speculators continue to seek record highs against the euro," said Michael Woolfolk, currency strategist at Bank of New York in New York. "There is simply no reason to be buying the dollar."
Several Wall Street firms have downgraded their outlook on U.S. gross domestic product over the next several quarters.
The euro rose earlier to a record high at $1.4130, according to Reuters data. It last traded at $1.4095, almost flat on the day. Analysts saw technical resistance at $1.4210.
The dollar traded at 114.94 yen, 0.43 percent lower on the day.
Still, analysts say the recent sharp declines in the dollar may provide to some investors a short-term buying opportunity.
"The U.S. dollar feels quite weak, but I wouldn't be surprised to see some short-term profit-taking, people buying some U.S. dollar and selling some euro, but I do not expect it (the euro) to move too much lower than here," Firas Askari, head currency trader at BMO Nesbitt Burns in Toronto.
Interest rate futures are pricing in a roughly 66 percent chance of a 25 basis point Fed rate cut in October, down from 72 percent at Friday's close. At least one more quarter-point cut has been factored in by year-end on top of any move at the Fed's next meeting in October.
"It's all about interest rates. Once the Fed starts an easing cycle, I don't believe it's ever gone one move and out. I am confident we will have more easing, at least 25 (basis points), probably another following early next year," said Askari.
The dollar index, which tracks the dollar's move versus a basket of six currencies, slipped to a 15-year low of 78.313, but recouped some losses to trade at 78.487.
Market players are keeping a close eye on whether the dollar index breaks the all-time low of 78.19 struck in September 1992, a level analysts said would provide a key test of whether the U.S. currency's sell-off deepens or pauses.
Investors shrugged off more criticism of the European Central Bank by the French government. An aide to French President Nicholas Sarkozy in an interview published on Sunday repeated recent comments arguing the euro's strength is eroding the competitiveness and productivity of businesses.
ECB President Jean-Claude Trichet dismissed the criticism, calling it an outdated debate and saying the central bank's first mandate was to ensure price stability.