The dollar fell to its lowest level against the euro this week amid concerns about terrorist threats, a possible trade war and the funding of the US current account deficit.
Geopolitical worries resurfaced to add to the dollar's woes. The heavy security surrounding President Bush's visit to London unnerved traders in the City - the biggest foreign exchange trading centre.
On Thursday, the attacks on British targets in Turkey made currency traders even more jumpy.
On Tuesday, the euro jumped two cents to a high of $1.1977 after data showed net portfolio inflows into the US fell to $4.2 billion in September, less than one-tenth of their August level and far short of the $46 billion needed to fund the US deficit each month.
The US imposition of quotas on Chinese textile imports and concerns that the ongoing battle over steel tariffs could escalate also made investors jittery towards the dollar.
The euro has since held around $1.19 against the dollar and ended trading yesterday at at $1.1916 in European trade. - (Financial Times Service)
