Dollar declines on doubts about Fed program

Story link: Dollar declines on doubts about Fed program

The US dollar hit another record low versus the euro on a general feeling that the injection of up to $200 billion into the system will not be effective in helping the economy to avoid recession by increasing the amount of money available for loans.

A European Union report showing that industrial production in the Eurozone was up 0.9 percent, twice the expected amount, in January helped the euro to gains, as did expectations that European Central Bank President Jean-Claude Trichet would emphasize the risk of inflation in remarks later in the day.

The dollar dropped as low as $1.5504 to the euro and was trading at $1.5487 to the euro at nearly noon in New York, while the greenback also dropped in relation to the yen, to ¥102.4650.

The pound also gained on the dollar, with the US currency trading at $2.0217 to the pound just before noon, while the Swiss franc was up at SFr1.0223 to the dollar after trading at SFr1.0241 earlier.

The yen gained against several major currencies on new figures showing that Japan’s economy grew at an annualized 3.5 percent in the last quarter, more than had been anticipated.

Although the euro gained on the yen to ¥158.6875 versus the shared currency, gains by the yen included a substantial jump versus the South Korean won, to W9.4895 to the yen.