Tuesday 22 April 2008

The dollar dropped to a new low against the European single currency, as new data point to the US property market slump caused by the subprime mortgage crisis.

The euro jumped to a record 1.6002 dollars here Tuesday after weak US housing market data added to fears over the health of the US economy.

The dollar fell after a report showed that sales of existing US homes fell 2.0 percent in March, underscoring the extended slump in the housing market in the fallout from the subprime home loan crisis.

The National Association of Realtors said the annualized sales pace was 4.93 million, weaker than the 4.95 million expected by Wall Street economists.

The report also showed a 19.3-percent plunge year-over-year in existing home sales, the largest segment of the housing market.

The data reflected a meltdown in the property market after years of sizzling growth and a speculative bubble.

The boom-and-bust has slammed the entire economy, leading to rising foreclosures and massive losses for banks, and threatening to drive the US economy, the world's largest, into recession this year.