The dollar dropped the most in more than a week against the euro on concern Israeli attacks on Hamas in the Gaza Strip will fan Middle East tensions and disrupt oil supplies to the U.S., the world’s biggest energy consumer.
The greenback also slid versus the yen before U.S. housing and manufacturing reports this week that may show the world’s largest economy is slipping further into recession.
The British pound fell to near a record low against the euro after a survey of U.K. estate agents and surveyors forecast home prices will slide in 2009, extending this year’s declines.
“The tensions in the Middle East appear to be causing buying of the euro,’ said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s biggest bank. “When there’s geopolitical risk in that region, the dollar tends to be sold.”
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