Yen, pound strengthen versus US dollar

Yen, pound strengthen versus US dollar

Story link: Yen, pound strengthen versus US dollar

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The US dollar weakened versus the yen on Tuesday for the sixth session in a row on increasing sentiment that the Federal Reserve will cut US interest rates by three-quarters of a percentage point this month, to 2.25 percent.

Declines for the dollar also came after Fed chairman Ben Bernanke urged banks to write down more mortgage debt and forgive those debts to homeowners at risk of defaulting on their home loans.

The yen also gained on the euro during the day’s session, trading at ¥156.5302 to the euro and at ¥102.8350 to the dollar in late morning trade in New York.

The pound also gained on the greenback as analysts cut back on their estimates of how much the Bank of England will cut interest rates this year, going as high as $1.9891 to the pound before slipping back to $1.9859 to the pound just after 11 a.m. in New York.

The pound was weaker, however, versus the euro, trading at 76.65p to the shared currency in New York.

The Australian dollar declined versus its US counterpart as the Reserve Bank of Australia raised interest rates there to 7.25 percent but some analysts said that they believe rates will not go up again for awhile.

In addition, the Bank’s governor said that consumer spending in Australia seems to be moderating.

In late afternoon trade in New York, it cost 92.81 cents US to buy an Australian dollar.