Dollar Heads for Weekly Decline Against Euro

The dollar headed for a second weekly decline against the euro as traders bet the Federal Reserve will keep cutting interest rates to avert a recession in the world's biggest economy., Bloomberg 1/31/2008 6:53:12 PM

The U.S. dollar fell against 15 of the 16 most-traded currencies this week on speculation a U.S. government jobs report will bolster the Fed's case for further reductions. It declined the most against the Brazilian real and the New Zealand dollar as investors sought high-yielding assets in the southern hemisphere.

The dollar lost 1.2 percent this week to $1.4863 per euro as of 9:59 a.m. in Tokyo from $1.4681 on Jan. 25. It reached $1.4967 per euro on Nov. 23, the weakest since the European currency debuted in 1999. Against the yen, the dollar traded at 106.43 after falling 0.3 percent this week. The euro traded at 158.17 yen after increasing 0.9 percent this week.

The dollar declined 1.3 percent this week to 1.7592 Brazilian reals. It fell 1.2 percent against the New Zealand dollar 78.71 U.S. cents. The dollar slid 1.4 percent against the Swiss franc, hitting a record low of 1.0758 yesterday. The Fed lowered the target rate for overnight lending between banks by a half-percentage point to 3 percent to prevent the economy from falling into a recession on Jan. 30.

In January, the yen rose 5 percent against the dollar, the biggest increase since 2001, as global stocks fell. The Swiss franc, another currency used to finance the carry trade, gained 4.7 percent against the dollar last month. Switzerland's benchmark lending rate is 2.75 percent.

Dollar Heads for Weekly Decline Against Euro