Finance and Economic

The dollar sank against the euro and fell against the other major currencies on Wednesday.

Oil soared to a new record past $133 and the Federal Reserve, in the release of minutes from its April meeting, forecast a softening economy and higher unemployment in 2008.

Meanwhile, an important index of German business confidence climbed unexpectedly.

The 15-nation euro rose to $1.5780 late in New York from $1.5669 late Tuesday.

The British pound climbed higher to $1.9689 from $1.9677, while the dollar was unchanged at 104.17 Japanese yen.

In later trading, however, the dollar sank to 102.97 yen.

The Fed’s minutes cut growth estimates for the rest of 2008. Economic activity was "likely to be particularly weak in the first half of 2008; some rebound was anticipated in the second half of this year," the minutes said. The central bank predicted higher unemployment and growing inflation.

But in Germany, Europe’s biggest economy, the Ifo Institute said business confidence posted an unexpected increase for May, retreating from the more than two-year low set a month earlier. That suggested that German companies have so far weathered the euro’s near-record strength against the dollar and soaring oil prices.

The unexpected increase "is accelerating the pace of the dollar decline, broadening the sell-off beyond just rising oil," said Ashraf Laidi, an analyst at CMC Markets in New York in a research note cashadvance. "Considering that the US downturn has been deeper than its euro zone counterpart, a recovery in the latter suggests more positive ground for the euro than the dollar, especially as it means a possible rate hike," he said.

Oil and gas prices have hit a string of records recently, compounding inflation fears around the world. On Wednesday, oil prices rose to a new record above $133 a barrel.

Skyrocketing oil prices have contributed to worries that consumers will buy less as fuel takes a larger share of their budgets.

In other New York trading, the dollar slid to 1.0272 Swiss francs from 1.0368 francs late Tuesday, and fell to 98.48 Canadian cents from 99.23 Canadian cents. 

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