Dollar Falls to Lowest Against Euro in Almost Two Weeks

The dollar fell to the lowest level against the euro in almost two weeks as traders increased bets that the Fed will cut the target lending rate by a half-percentage point this week.

The currency remained lower after a government report showed U.S. new-home sales fell to a 12-year low in December. The Swiss franc rose 1.6 percent against the South African rand and 0.8 percent versus the Brazilian real as a retreat in European and Asian stocks prompted investors to sell higher- yielding assets funded with low-cost loans made in Switzerland.

The dollar declined 0.7 percent to $1.4788 per euro at 11:40 a.m. from $1.4681 on Jan. 25. It touched $1.4798, the lowest since Jan. 16. The Swiss franc increased 0.7 percent to 1.0885 per dollar from 1.0967. Japan's currency was little changed at 106.80 per dollar, compared with 106.72. The euro increased 0.8 percent to 157.97 yen from 156.68.

Sales of new homes in the U.S. decreased 4.7 percent to an annual pace of 604,000, the fewest since February 1995, from a 634,000 rate the prior month, the Commerce Department said today in Washington. The median price last month dropped 10 percent from December 2006, the biggest 12-month decline in 37 years.

Dollar Falls to Lowest Against Euro in Almost Two Weeks, Bloomberg
1/28/2008 9:13:54 AM