US dollar lower versus euro

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The US dollar declined versus the euro on Tuesday amid continuing speculation that the US Federal Reserve will cut interest rates again soon.

The euro was helped in relation to the dollar and other currencies on comments from the governor of the Bank of France that there is optimism that the economy of the European Union will continue to grow, while the dollar was hurt by the expectation that US homebuilder sentiment will hold at just above record lows this month rather than getting better.

At just before noon in New York the dollar traded at $1.4743 to the euro.

The yen and the pound also lost ground to the euro, with the yen suffering as gains in equities markets made more investors interested in pursuing high-risk carry trades.

In midday trade in New York, the yen was trading at ¥158.4135 to the euro while it traded at ¥107.4500 to the US dollar and at ¥209.5972 to the pound.

The pound declined after Barclays Bank (LSE: BARC; NYSE: BCS; TYO: 8642)said that its second-half profits had dropped by 21 percent.

It was the second day in a row of declines for the pound after Monday’s announcement from Prime Minister Gordon Brown that the UK will nationalize another bank, the troubled Northern Rock (LSE: NRK).

The pound traded at 75.58p to the euro while it cost $1.9506 to buy a pound.

Meanwhile, the Australian dollar gained in relation to most major currencies after comments from a central bank official that inflation could make it necessary to increase interest rates there.

The aussie traded at A$1.0865 to the US dollar, at A$1.6018 to the euro, and at A$2.1193 to the pound.