Dollar Trades Near One-Week Low


The dollar traded near a one-week low versus the yen as stocks declined on speculation credit-market losses at financial firms will deepen.

The currency may weaken against the euro for a third day as equities fell and crude oil prices rose, raising concern that the nation's economic slowdown will be prolonged. The British pound traded near a two-year low on speculation the Bank of England will say today in minutes of its last policy meeting that it expects inflation to ease, adding to the case for a cut in interest rates.

The dollar traded at 109.89 yen at 11:39 a.m. in Tokyo, from 109.72 in New York yesterday. It dropped to as low as 108.38 in the past week. The U.S. currency was at $1.4761 per euro from $1.4776 yesterday, when it touched $1.4631, the strongest level since Feb. 20.

The U.S. economy may face a persistent acceleration in inflation as higher food and energy prices prompt companies to pass on cost increases, Dallas Fed President Richard Fisher said yesterday.

The dollar has gained 8 percent versus the euro since touching an all-time low of $1.6038 on July 15 and appreciated 1.8 percent this month against the yen as economies in Europe and Japan shrank and crude oil fell more than 20 percent from the record $147.27 a barrel set July 11.


TradingEconomics.com, Bloomberg
8/19/2008 7:52:43 PM