Economy, Business And Markets

Dollar at Record High

Dollar at Record HighDollar at Record High

The dollar reached a 1-1/2 year high on Wednesday as stocks slipped further and oil prices sent investors scurrying for the cover of foreign currencies.

The US dollar, the euro and sterling kept their momentum versus the rial as the equity market slipped to a 14-month low in Tehran. The rial’s sell-off is continuing due to a further decline in the price of oil – Iran’s main source of revenue.

Sterling jumped the most among major currencies. The British currency rose 1.1 percent to 55,050 rials by 12:56 GMT on Wednesday.

The greenback reached an 18-month high versus the rial early in the day, but retreated later. The dollar was up by 0.6 percent to 35,000 rials.

The euro also gained 0.53 percent and was exchanged at 43,930 rials by 12:56 GMT on Wednesday, in Ferdowsi Street – the centre of currency trade in Tehran.

Tehran Stock Exchange’s main index, edged 0.16 percent lower to a record trough of 69,494.80 on Wednesday, based on TSE data.

Plunging oil prices are creating havoc in Tehran as traders try to protect their investments. Analysts are concerned that Iran’s falling oil revenues may send the Iranian economy spiraling back into recession.

There was no respite for oil as Brent leaked another dollar to $58.92 a barrel in Europe on Wednesday, while WTI crude lost $1.39 to $54.54, based on Bloomberg’s generic pricing index.

Oil prices have halved since June highs, plummeting to 5-1/2 year lows.  The drop has put real pressure on Iran for whom oil revenues comprise around 80 percent of exports. Iran’s revenue from crude sales fell 30 percent because of oil’s plunge, which could put pressure on the budget, Rouhani said Dec. 8.