Investor fears of a drop back into global recession lifted the currencies traders consider safe havens: The Swiss franc, Japanese yen and the U.S. dollar, The Associated Press reports.
A slate of reports released Thursday on U.S. manufacturing and jobs and the housing market spooked investors, however. There was a steep drop in U.S. home sales last month, more people filed jobless claims last week and the August regional manufacturing report was weak. There also was downbeat data from overseas.
Morgan Stanley also cut its forecast for global economic growth for this year and 2012, saying the U.S. and the 17 countries that use the euro were “hovering dangerously close to a recession.”
The Dow Jones industrial average plunged as much as 500 points. And gold, which has become something of a substitute currency for nervous investors, hit a new record price near $1,830 per ounce, though it remains below its 1980 peak when adjusted for inflation.
In currencies, the euro fell to $1.4333 from $1.4451. Stocks of European banks sold off on concerns that new policy measures proposed by leaders to try to contain the European debt crisis may not succeed and could hurt the banking system.
The British pound fell to $1.6486 from 1.6566.
