Dollar Falls versus Euro

The dollar fell against the euro, erasing yesterday's gains, on speculation the worst U.S. housing slump in a quarter of a century will swell credit-market losses.

The currency weakened against the Japanese yen and Swiss franc after Bank of America Corp. predicted the Federal Reserve will lower its target rate by another 75 basis points this year following a reduction to 2.25 percent yesterday. U.S. stock-index futures and European equities fell on concern banks will report more writedowns related to subprime-mortgage investments.

The dollar fell to $1.5713 per euro at 7:46 a.m in New York, from $1.5625 yesterday, when it rose 0.7 percent, the most since Feb. 7. The dollar declined to 99.15 yen, from 99.85 yesterday, when it surged 2.7 percent, the biggest gain since January 1999. The yen traded at 155.59 per euro, compared with 155.95 yesterday.

The dollar slipped to 0.9973 Swiss franc from 1.0024. The franc, often favored in times of crisis, has advanced 14 percent this year. The U.S. currency fell 0.6 percent to 93.24 U.S. cents per Australian dollar and slipped 0.9 percent against the New Zealand dollar to 81.40 cents.

Dollar Falls versus Euro, Bloomberg
3/19/2008 7:05:40 AM