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. Last Updated: 07/27/2016

The Dollar Dips to a Record Low

NEW YORK -- The dollar dropped to a record low versus the euro, and the weakest in 26 years versus the pound on speculation losses from sub-prime mortgages will worsen the U.S. economic outlook.

The U.S. currency fell a sixth straight week against the euro and pound, while tumbling to a 22-year low versus the New Zealand dollar and the weakest in 18 years against the Australian dollar. The dollar may extend its drop next week as U.S. reports may show declining sales of existing and new homes.

"The outlook for the dollar is still bearish," said Robert Robis, an international fixed-income portfolio manager in New York at OppenheimerFunds Inc., which oversees $250 billion. "There are still significant concerns that the sub-prime debacle will lead to more serious problems in the financial markets."

The dollar fell 0.3 percent this week to $1.38 per euro, 1.1 percent to $2.05 per pound and 0.5 percent to 121.27 yen.

Robis predicted the dollar will drop to at least $1.40 against the euro and $2.10 per pound in the next three months.

The euro Friday touched $1.38, the weakest since the euro's January 1999 debut, and $2.05 per pound, the lowest since May 1981.

The U.S. currency also slumped to 79.92 U.S. cents per New Zealand dollar, the weakest since the central bank allowed the currency to trade freely in 1985.