USD gains on euro, pound

Story link: USD gains on euro, pound

The US dollar gained on the euro Wednesday on demand for US dollars from foreign banks and ahead of a Senate vote on the $700 billion bailout proposal and a proposal to raise FDIC protection on deposits from $100,000 to $250,000.

The euro declined ahead of Thursday’s meeting of the European Central Bank, where Eurozone interest rates are expected to be held at 4.25 percent.

In late morning trade in New York, the dollar traded at $1.4030 to the euro.

The pound weakened against the dollar and the euro after the Chartered Institute of Purchasing and Supply reported that its manufacturing index dropped to 41 in September from 45.9 in August, indicating that manufacturing activity in the UK contracted last month.

At around 11:30 a.m. in New York, the pound traded at 79.05p to the euro, while it took $1.7747 to buy a pound.

Despite its gains against the euro and pound, the greenback was weaker in relation to the yen after the Institute for Supply Management reported new numbers which showed that US manufacturing activity also contracted in September, with the ISM’s factory index falling from 49.9 in August to 43.5 in September.

The yen traded at ¥105.58 to the US dollar in New York trade.

The Australia and New Zealand dollars both declined in relation to the greenback on expectations that their central banks will cut interest rates soon as well as on declines in commodities prices.

In the latest report, it took 79.05 cents US to buy an Aussie while the yen was stronger in relation to the Australian currency, trading at ¥83.6823 to the Aussie.

The kiwi declined to trade at 67.48 cents US, but it gained on the yen, to ¥71.387 to the New Zealand dollar.