By Stanley White and Kosuke Goto
The dollar is weaker versus 13 of the 16 most-active currencies this quarter before a report tomorrow that economists say will show housing starts in the U.S. fell to a 14-year low in October, signaling the real-estate slump will continue to weigh on economic growth.
The U.S. currency has declined 4.4 percent against the yen and 3.6 percent against the Swiss franc in November as the worst housing market in 16 years caused the Fed to cut rates to 4.5 percent and companies reported more losses on securities tied to U.S. subprime mortgages.
Signs of a cooling economy has prompted traders to increase bets that the Federal Reserve will lower interest rates again this year, diminishing the allure of the nation's assets.
"The U.S. housing slump has not bottomed out yet,'' said Kazuo Mizuno, chief economist in Tokyo at Mitsubishi UFJ Securities Co., a unit of Japan's largest publicly traded lender by assets. The Fed may cut rates to 2.5 percent by the end of 2008 and the dollar will keep suffering, Mizuno said.
The dollar may fall to 100 yen this year, Mizuno said.
The U.S. Dollar Index traded on ICE Futures U.S. in New York, which includes the euro, British pound and Japan's yen, reached a record low of 74.978 on Nov. 9, the weakest since the index started in 1973. It last stood at 75.770.
OPEC Not Happy With US Dollar.
Speaking after the end of the summit, Mr Ahmadinejad said all leaders at the meeting were unhappy with recent falls in the value of the dollar.
The dollar has weakened considerably against the euro and other currencies in the past 12 months.
Its decline has affected the revenues of Opec members because most of them price and sell their oil exports in the US currency.
Mr Ahmadinejad said that all Opec countries had showed interest in converting their cash reserves into other currencies.
"They [the US] get our oil and give us a worthless piece of paper," he told reporters.
But Saudi officials were against including any such language in the declaration. One is reported to have warned that it could add to the pressure on the dollar.
However, in the communique Opec did make a reference to the debate, by committing itself to studying "ways and means of enhancing financial co-operation".
Iran's oil minister said that this would allow the formation of a committee to study the dollar's affect on oil prices and investigate the possibility of alternative trading currencies.