The dollar resumed its downslide today, with the euro remaining comfortably above the $1.32 level, as solid US consumer confidence data failed to boost the US currency.
The euro surged to $1.3245 in late European trade from $1.3060 late yesterday in New York, after breaching the symbolic $1.31 level.
In the US, the Conference Board's consumer confidence index dropped to 104 in February from an upwardly revised 105.1 in January, above expectations for the index to drop to 102.3 from the earlier estimate of 103.4.
The US currency has fallen sharply since yesterday, helped by thin trading causing exaggerated movements as US markets were closed for a public holiday as well as by a report that South Korea plans to diversify its reserves away from the US dollar.
Analysts said the dollar's relatively poor performance last week, given the very positive newsflow, may have suggested a reversal in sentiment towards the US currency. Consequently, it took just the slightest piece of negative news to trigger a sell-off.
Upbeat comments last week from Federal Reserve Chairman Alan Greenspan, as well as some solid US data, all pointed to higher US interest rates ahead, and the possibility of more aggressive monetary tightening than the market had previously anticipated.
