Dollar Falls

The dollar fell against the euro for a second day as the U.S. Treasury's plan to inject $250 billion into financial institutions to revive lending reduced demand for the greenback as a haven.

The dollar fell 0.5 percent to $1.3654 per euro at 3:16 p.m. in New York, from $1.3581 yesterday. The yen dropped 0.2 percent to 138.78 per euro from 138.57. Japan's currency traded at 101.94 per dollar, compared with 102.01. The dollar weakened as much as 1.7 percent to $1.7631 per pound, the weakest level since Oct. 8.

The U.S. currency pared its loss against the euro as the Standard & Poor's 500 Index dropped 1.6 percent after increasing as much as 4.1 percent today and rallying yesterday the most in seven decades.

Canadian dollar weakened against the U.S. dollar as the price of crude oil fell on concern that coordinated measures by governments won't be enough to avert a global recession. The Canadian dollar has declined 13 percent since July 11 when oil reached a record $147.27 a barrel. Crude has fallen 47 percent since then. The currency fell as much as 1.2 percent to C$1.1617 per U.S. dollar, from C$1.1475 yesterday. The currency last traded at C$1.1612 at 3:10 p.m. in Toronto after earlier climbing as much as 1.5 percent.

Brazil's real rose for a second day on a U.S. plan to inject $250 billion into banks and as Brazil's central bank again sold dollars in the spot market. The real rose 2.8 percent to 2.0857 per dollar at 3:11 p.m. New York time, following a 7.9 percent surge yesterday. The rally nearly erases last week's 11.6 percent plunge.

The Australian dollar soared, posting its biggest two-day gains against the greenback and the yen, after governments worldwide announced measures to stabilize financial systems. New Zealand's currency also rose. The Australian dollar jumped 5.3 percent to 70.77 U.S. cents as of 2:06 p.m. in Sydney, from 67.24 cents late in Asian trading yesterday. That extended its two-day advance to 7.3 percent. The currency surged 7.5 percent to 72.61 yen, for a two-day gain of 11.2 percent. New Zealand's dollar gained 2.6 percent to 62.02 U.S. cents from 60.65 cents late in Asia yesterday. It advanced 4.4 percent to 63.61 yen.

India's rupee rose for a second day as stocks advanced on speculation plans by the U.S. and European governments to buy stakes in banks will prevent a credit-market collapse and spur demand for local assets. The rupee rose 0.4 percent to 48.08 per dollar at the 5 p.m. close in Mumbai, according to data compiled by Bloomberg.,
10/14/2008 12:52:56 PM