Dollar hits new low against euro

May 20, 2009

, LONDON, May 20 – The dollar sank on Wednesday to a four-month low against the euro as rebounding Wall Street stocks encouraged investors to switch away from the safe-haven US currency.

In London afternoon trade, the European single currency advanced to 1.3792 dollars. That was the highest point since January 8 and compared with 1.3634 dollars late in New York on Tuesday.

Wall Street charged higher Wednesday at the open, as increased optimism about the financial sector helped the market maintain upward momentum.

The blue-chip Dow Jones Industrial Average rose 0.65 percent to 8,530.12 in early trades.

Traders also digested the US government\’s scheme to buy up so-called toxic assets.

A public-private investment program designed to buy up toxic assets clogging the US banking system will begin operating within six weeks, US Treasury Secretary Timothy Geithner said on Wednesday.

The programme was announced March by the administration of President Barack Obama to buy up assets from soured real estate investments that remain on bank balance sheets, making it difficult for the institutions to expand lending.

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