(Source: Associated Press/AP Online)
NEW YORK - The dollar fell to an annual low against the euro Tuesday after a dip in German investor confidence and disappointing earnings results failed to undermine expectations of economic recovery.
Traders have been leaving the safety of the dollar in recent weeks amid increasing hints of an economic turnaround.
Johnson & Johnson was the first among a number of key companies to issue quarterly results this week. The health care products maker said sales fell 5 percent in the third quarter, a steeper drop than analysts predicted.
Global investors are examining companies' third-quarter earnings announcements and forecasts for the months ahead for signs that the economy is on a sounder footing.
After U.S aluminum maker Alcoa Inc. kicked earnings season off last week with results that topped expectations, major banks such as JPMorgan Chase & Co. and Citigroup Inc. will be releasing their reports this week, as will Google Inc. and General Electric Co.
The 16-nation euro rose sharply to a daily high of $1.4876, its highest level since August 2008. In late New York trading, it bought $1.4829, up from $1.4776 late Monday.
The euro "is consolidating around $1.4800 and the next big level will be a move up toward the psychological $1.5000 mark," currency analyst David Jones at IG Index wrote in a research note.
Meanwhile, the British pound jumped to $1.5901 from $1.5786 as improvements in British retail sales and house prices were overshadowed by warnings that business confidence remains frail and inflation dropped to a five-year low.
The dollar slipped to 89.76 Japanese yen from 89.84 yen.
In Germany - Europe's largest economy - the ZEW institute's index, which gauges investors' outlook for the next six months, fell 1.7 points in October to 56 points but remained well above its historical average of 26.7 points.
The survey found that while increases in industrial orders boosted sentiment, recent data showing a decline in exports and doubts about the strength of consumer spending weakened expectations. Investors nevertheless continued to believe in a gradual recovery.
In other late trading Monday, the dollar slipped to 1.0337 Canadian dollars from 1.0357 late Monday, and edged down to 1.0230 Swiss francs from 1.0271 francs.
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