USD down on more expected rate cuts

Story link: USD down on more expected rate cuts

The US dollar declined versus the euro on Tuesday on the possibility that the US Federal Reserve will cut interest rates again next month, by as much as half a percentage point.

The euro gained ahead of testimony by European Central Bank president Jean-Claude Trichet before the European Parliament, due Wednesday, while the dollar was hurt by a report from the Conference Board that showed US consumer confidence down to 64.5, a five-year low, from 76.4 in February.

At around 11:30 a.m. in New York the dollar traded at $1.5586 to the euro while it took ¥ 100.0800 to buy a dollar after the yen gained to ¥ 99.82 to the dollar earlier.

The yen dropped versus the euro, to ¥ 155.9797.

Both the greenback and the yen were down versus the Australian and New Zealand dollars as investors were willing to enter into risky carry trades, selling lower-yielding currencies to finance purchases of higher-yielding currencies.

At just before noon in New York the dollar traded at 91.48 cents to the Australian dollar and at 80.59 cents to the New Zealand dollar while the yen traded at ¥ 91.5532 to the aussie and at ¥ 80.668 to the kiwi.