Forex

NEW YORK (AP) - Widespread concern about the outlook for the U.S. economy pushed the dollar to record lows against the euro and to 12-year lows against the yen Thursday, while gold and oil prices also surged.

The euro rose to a new high of $1.5625 following a report that showed U.S. retail sales fell in February, beating a day-old record of $1.5559. It later fell back to $1.5587 in late New York trading, still above the $1.5526 it bought in New York on Wednesday.

The dollar dropped below 100 Japanese yen for the first time since November 1995. It traded as low as 99.75 yen before recovering some ground to change hands at 102.04 yen, unchanged from Wednesday.

Analysts agreed that the dollar was likely to remain weak amid financial market jitters.

News from Carlyle Capital Corp. that it expected creditors to confiscate its remaining assets -- investment-grade mortgage-backed securities -- sent the fund's shares plummeting and rattled markets around the globe.

'The latest blow to the dollar and world bourses intensified in early European trade when Carlyle Capital Corp. said ... it expected creditors to seize all of the fund's remaining assets after unsuccessful negotiations to prevent its liquidation,' said Ashraf Laidi, chief foreign exchange strategist for CMC Markets in New York.

That caused a wide sell-off on markets from Tokyo to London and prompted currency traders to sell their dollars.

Michael Woolfolk, senior currency strategist at the Bank of New York, said he expects the dollar to keep dropping ahead of the Federal Reserve's meeting next week. Speculation has been growing that the Fed might cut rates by as much as three-quarters of a percentage point.

'Other currencies have rallied too far, too fast,' Woolfolk said. 'The Fed has turned a blind eye to inflation, and as the expectations fall for the U.S. economy and global equities, we will continue to see that undermine the dollar.'

The yen's strength is bad news for Japan's economy, which has been showing signs of weakening, because it makes exporters' products more expensive abroad and erodes the value of their overseas earnings.

Japanese leaders quickly cautioned against instability in currency markets, but made no mention of any intervention to stem the dollar's slide.

The dollar's decline also pushed oil higher, with prices hitting a new intraday high of $111 before settling at $110.33 a barrel on the New York Mercantile Exchange. Meanwhile, April gold futures touched $1,000 an ounce for the first time.

In other late New York trading, the dollar fell against the British pound, which edged up to $2.0292 compared to $2.0243 on Wednesday night. The dollar slipped to 1.0143 Swiss francs from 1.0182 Swiss francs, but rose to 1.0141 Canadian dollars from 1.0096 Canadian dollars.

AP writers Matt Moore in Frankfurt, Germany; Yuri Kageyama in Tokyo; Robert Wielaard in Brussels, Belgium; and Pablo Gorondi in Budapest, Hungary, contributed to this report.