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