Euro hits new record against dollar, hits US$1.6038

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The 15-nation currency's new all-time high against the dollar surpassed its previous record of US$1.6018 set on April 22.

After reaching the record, the euro fell back to US$1.5969 still above the US$1.5916 it bought in late New York trading Monday.

The rise means that everything is more expensive for Americans who are traveling in the euro zone, from ice cream to beer to souvenirs.

"Obviously it is a problem," Gary Berman, a New Jersey cardiologist visiting Berlin said. "I think twice about where we have dinner now, and I work harder to negotiate rates."

The increase came even as a new report showed that German investor confidence tumbled to its lowest level in more than 16 years amid soaring food and oil prices in Europe's biggest economy.

The ZEW institute said its monthly index, which measures investors' expectations for the German economy over the next six months, dropped to minus 63.9 in July from minus 52.4 in June.

"Even the shocking ZEW survey has been insufficient to lend any sustainable sympathy to the dollar," said James Hughes, a currency analyst at CMC Markets in London.

He added that the currency traders were derisive about Sunday's announcement by the U.S. Federal Reserve regarding its plan to shore up mortgage lenders Fannie Mae and Freddie Mac.

"It's apparently done little more than underline the perilous state of the U.S. economy," he said.

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