FRANKFURT, GERMANY

FEBRUARY 27, 2008

Frankfurt's DAX and other European shares dipped in early trade on Wednesday (February 27) while one Frankfurt trader predicted rough times ahead for German exporters as the euro hit a new high of 1.50 against the U.S. dollar.

Trader Stefan Scharfsetter of Baader Wertpapierhandel said the 1.50 mark "is not really a surprise,"

"The euro has been at a record high for some time," he said.

"We see that the interest level difference between Europe and the United States has dramatically dwindled. That's what pushes the euro and the 1.50 mark was just a matter of time. Now it has happened," he added.

Scharfsetter added that as a country exporting into non-euro countries, the high euro is a considerable burden.

He said he remembered how the head of German chemical company BASF said "not too long ago that the 1.50 mark to them means a loss of 250 million in the volume of sales for each additional cent (above the 1.50 mark)."

The U.S. dollar extended losses to fall to fresh record lows against the euro and two-week lows against the yen on Wednesday after reports showed U.S. consumer confidence at its lowest in five years.

A weak dollar can sometimes trigger commodities buying as investors seek to preserve their nominal value in other currencies.

Most commodities markets pushed higher on Wednesday with gold hitting a new record and copper, aluminium and silver hovering near multi-year peaks.

Investors view these metals as a hedge against the dollar and an alternative to other financial markets.