With the buildup underway to an expected US rate cut Wednesday, the euro and oil prices launched the new trading week Monday by surging to all-time highs, according to dpa. Europe's common currency rocketed up to 1.4438 euros to reach its highest point since its launch in 1999 on market forecasts that the US Federal Reserve will deliver another rate cut next week in a bid to spur growth and to ease the credit crunch in the world's biggest economy. "The is chasing one high after another" said Rainer Sartoris, economist with the investment house Bankhaus HSBC Trinkhaus & Burkhardt. At the same time, oil prices charged past 93 dollars a barrel to hit a new record as the Iraq-Turkish border emerged as a potential new global flashpoint and tensions grew between Washington and Tehran, said the DPA. Similarly, friction between the US and Iran as well Turkey's military buildup on the Iraq, the weak dollar along with US economic worries helped to power gold to 792.90 dollars an once, as a result breaching a 28-year high. However, the spiralling oil prices, global tensions and concerns about the impact of the strong euro on European exporters had little impact on Europe's stock markets. The benchmark Eurostoxx 50 climbed 0.6 per cent in early trading Monday with national bourses across the 13-member eurozone posting similar gains. Europe's premier stock market in London rose 0.55 per cent. By mid-morning, the euro was trading above 1.44 dollars with analysts expect the euro to breach the key 1.45-dollar mark before the end of the year. Wednesday's expected Federal Reserve 25-basis-points cut in US borrowing costs comes after the American monetary authorities delivered a surprise 50-basis points reduction last month bringing official rates down to 4.75 per cent. Meanwhile, interest rate policy in the eurozone is finely balanced with interest rates on hold as the European Central Bank weighs up the implications of the credit squeeze.
