Dollar Hits 6-Month Low Against the Euro

The dollar fell to a six-month low against the euro Monday as U.S. stocks tumbled on concern last week’s terrorist attacks will sink the world’s biggest economy into recession.

Foreign investors sold dollars after dumping U.S. stocks, analysts said.

It took 92.40 cents to buy a euro, up from 92.07 late Friday.

But the dollar inched up against the yen, ending in New York at 117.73 yen from 117.29 Friday, after an early dive.

The dollar’s recent weakness concerns traders. They note that the United States remains heavily dependent on foreign capital. A falling dollar could make more foreign investors think twice about their U.S. assets because dollar weakness devalues those assets, analysts note.

Japan’s central bank worked to defend the dollar Monday. It sold yen for dollars after the dollar dropped to 116.65 yen, its weakest since Feb. 28.

For Japanese exporters such as Sony Corp. and Toyota Motor Corp., a declining dollar can damp overseas demand for their products by raising the cost of the goods for foreign buyers. Japan sells a third of its exports to the U.S.

Still, traders said the dollar’s decline may be exaggerated because there are larger-than-usual gaps between prices to buy and sell dollars--perhaps reflecting the trouble traders in New York have had getting to work.