Dollar Falls Against Euro, Yen


The dollar fell toward a record low against the euro and the lowest in eight years versus the yen as some traders started to bet that the Federal Reserve will cut interest rates by 1 percentage point to avoid a recession.

The currency declined for a fifth day against the British pound as widening credit-market losses added to speculation that the Fed will cut its benchmark rate to 2 percent on March 18. The yen gained as a Japanese government report showed machinery orders rose at the fastest pace in more than seven years in January, signaling demand from emerging markets may help the economy withstand a U.S. slowdown.

The dollar fell to 102.30 yen at 10:51 a.m. in Tokyo from 102.67 yen on March 7, when it slid to 101.43, the lowest since January 2000. It also weakened to $1.5378 per euro from $1.5355 late last week, when it touched $1.5459 a euro, the weakest level since the single currency's debut in 1999.

The U.S. currency declined to $2.0187 against the pound from $2.0134 on March 7, when it slumped to $2.0217, the lowest since Dec. 18. It also dropped to 93.03 cents versus the Australian dollar from 92.68. It fell 0.4 percent to 1.0217 against the Swiss franc, approaching a record low of 1.0135 set on March 7.

The dollar slid before a Commerce Department report on March 13 that is forecast by economists surveyed by Bloomberg News to show consumer spending at U.S. retailers slowed in February. A separate private report the next day will probably show consumer confidence fell this month to a 16-year low.

The yen also climbed, as for the first time in more than a decade, foreign exchange traders are confident that the Bank of Japan won't intervene in the currency market, paving the way for the yen to extend its biggest rally since 2000.


TradingEconomics.com, Bloomberg
3/9/2008 7:11:25 PM