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NEW YORK (AP) - The dollar fell against most major currencies on Wednesday, including a new low against the euro, which fetched $1.55, as skepticism grew over the latest U.S. Federal Reserve Bank plan to restore calm to jittery global credit markets.
The Fed on Tuesday unveiled a rescue package that would direct as much as $200 billion into banks and investment houses. The action was in concert with help from the European Central Bank and central banks in Britain, Switzerland and Canada.
But the Fed action was overshadowed by U.S. economic struggles, halting the dollar’s rise and pushing the euro to a record high of $1.5559, surpassing its previous record of $1.5495 set Tuesday.
Late Wednesday, the 15-nation euro fell back to $1.5526 - still above the $1.5319 it bought in New York late Tuesday.
“The positive dollar impact of yesterday’s coordinated central bank operations is already proving unsustainable as the U.S. currency falls across the board,” said Ashraf Laidi, the chief foreign exchange strategist for CMC Markets in New York.
Traders also weighed a report from Zawya Dow Jones that said the United Arab Emirates was deciding whether to continue pegging its currency to the plummeting U.S. dollar.
In January, Qatari Prime Minister Sheikh Hamed bin Jassem Al Thani said his country was also reconsidering its link to the dollar.
The British pound rose to $2.0243 from $2.0029 even after British Treasury Chief Alistair Darling cut forecasts for domestic growth when he delivered his first annual budget against the backdrop of the worst global economic conditions for a decade.
In other late New York trading, the dollar dropped to 102.04 Japanese yen from 104.17 yen and to 1.0182 Swiss francs from 1.0337 Swiss francs it traded Tuesday. Meanwhile, the dollar edged up to 1.0096 Canadian dollars from 1.0067 Canadian dollars.

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FRANKFURT, Germany (AP) — The dollar sank to a new low Friday against the euro, and neared a three-year low against the Japanese yen, after data showed U.S. job cuts hitting the biggest monthly number in five years.

The U.S. Labor Department said American employers cut 63,000 jobs in February - the starkest sign yet that the United States is heading toward a recession or in one already.

Those fears pushed the 15-nation euro to $1.5463, its first-ever rise above $1.54. It marked the latest in a string of record highs before it settled back slightly to $1.5413 in afternoon European trading - still above the $1.5370 it bought late Thursday in New York.

Also pushing up the euro were comments Thursday by European Central Bank president Jean-Claude Trichet, who made plain the ECB is more worried about inflation in the euro zone than the fallout from the rising euro.

That suggested the ECB’s benchmark interest rate will remain at 4% for the coming months, even as the U.S. Federal Reserve and, possibly, the Bank of England cut their key rates.

“The euro-dollar has taken another significant level this morning, having breached $1.5400,” said James Hughes of CMC Markets in London. “Although this may be initiating a degree of profit-taking in the short term, many will remain mindful of Trichet’s hawkish stance and tacit acceptance of a stronger euro at yesterday’s ECB rate-setting meeting.”

European businesses say they are starting to feel the pinch, notably from U.S.-based buyers who assert that the high euro makes European goods more expensive.

Pound above $2. Also Friday, the British pound traded above the $2 mark for a second day, buying $2.0185 - above the $2.0092 it bought in late New York trading the previous night. Like the euro, it jumped higher Thursday after the Bank of England kept its own interest rate unchanged at 5.25%.

The dollar fell to 101.99 Japanese yen from 103.09 yen on Wednesday, putting it at almost three-year lows.

“The prolonged silence from the Japanese camp in the face of the yen’s gains is not only historic but rather conducive to its ascent,” Ashraf Laidi, the chief foreign exchange analyst at CMC Markets in New York.

“The Federal Reserve’s persistent reiteration to take on the economic slowdown as its main priority over inflation will make the 100 yen figure an inevitability,” he said.

That could happen “as early as this month, especially if the Fed opts for a 75 basis point easing on March 18,” he said.

Lower interest rates can jump-start a nation’s economy, but can weigh on its currency as traders transfer funds to countries where they can earn higher returns. 

via CNN

TOKYO (AP) — The dollar plunged to a three-year low against the Japanese yen and another all-time low against the euro on Friday, amid growing fears about a weak U.S. economic outlook.

The dollar drifted as low as 102.45 yen early in the session before rebounding to 102.68 yen in afternoon trading. The dollar was at 103.09 yen late Thursday in New York.

The euro on Friday exceeded $1.54 for the first time, after the European Central Bank left its benchmark rate unchanged a day earlier and signaled that rate cuts are not expected in the near term.

That sentiment pushed the euro to a new high in European morning trading; it reached $1.5429 before dropping back slightly to $1.5395, above the $1.5370 it bought in New York late Thursday. It was the latest in a string of records for the 15-nation euro this week.

“The euro-dollar has taken another significant level this morning, having breached $1.5400, and although this may be initiating a degree of profit-taking in the short term, many will remain mindful of Trichet’s hawkish stance and tacit acceptance of a stronger euro at yesterday’s ECB rate-setting meeting,” said James Hughes of CMC Markets, referring to ECB president Jean-Claude Trichet.

European Union businesses said they were starting to feel the pinch, notably from U.S.-based buyers who assert that the high euro makes European goods more expensive.

Meanwhile, the British pound stayed above the $2 mark for a second day, buying $2.0132 in European trading, above the $2.0092 it bought in late New York trading the night before. Like the euro, it jumped higher after the Bank of England kept its own interest rate unchanged at 5.25%.

The Asian and European markets are waiting for the release of U.S. non-farm payrolls data later in the day.

“If jobs results are better than expected, they could give the dollar a temporary break from its downturn, but the larger dollar-selling trend is very strong and is unlikely to change any time soon,” said Masashi Matsuzawa, a senior dealer at Mizuho Corporate Bank.

Economists polled by Dow Jones Newswires predict U.S. non-farm payrolls for February to stay flat following a 17,000 decline in the previous month.

Expectations of further interest rate cuts by the Fed are also weighing on the dollar.

The Bank of Japan unanimously voted to keep interest rates unchanged for the fourth straight meeting, while Japanese Prime Minister Yasuo Fukuda announced his proposals for the position of the new central bank governor and deputy governors.

The dollar was mixed against other regional currencies, rising to 40.78 Philippine peso from 40.40 the previous session, while falling to 1.3862 Singapore dollar from 1.3878. 

via CNN