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. “The is chasing one high after another” said Rainer Sartoris, economist with the investment house Bankhaus HSBC Trinkhaus & Burkhardt. At the same time, oil prices charged past $93 a barrel to hit a new record as the Iraq-Turkish border emerged as a potential new global flashpoint and tensions grew between Washington and Tehran. Similarly, friction between the US and Iran as well Turkey’s military buildup on the Iraq, the weak dollar along with US economic worries helped to power gold to $792.90 an once, as a result breaching a 28-year high.

However, the spiraling 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% 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%. By mid-morning, the euro was trading above $1.44 with analysts expect the euro to breach the key $1.45 mark before the end of the year.

Wednesday’s expected Federal Reserve 25-basis-points cut in 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%. Meanwhile, interest rate policy in the eurozone is finely balanced with interest rates on hold as the European Central Bank weighs up the implications of the credit squeeze. The euro’s current strength is a long way from the common currency’s early days following its 1999 launch. With the eurozone overshadowed by what was then robust US economic growth, the euro sunk to a record low of 82.52 US cents in October 2000. (m&c.com)