By DPA
Frankfurt : With the build-up underway to an expected US rate cut Wednesday, oil prices and the euro launched the new trading week Monday by surging to all-time highs.
Oil prices charged past $93 a barrel to hit a new record as the Iraq-Turkey border emerged as a potential new global flashpoint and tensions grew between Washington and Tehran.
At the same time, Europe’s common currency rocketed up to $1.4438 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.
“This is chasing one high after another” said Rainer Sartoris, economist with the investment house Bankhaus HSBC Trinkhaus & Burkhardt.
Similarly, friction between the US and Iran as well Turkey’s military build-up on Iraq, the weak dollar along with US economic worries helped to power gold to $792.90 an ounce, 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 percent 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 percent.
Wednesday’s expected Federal Reserve 25-basis-points cut in the 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 percent.