US dollar weaker ahead of Fed rate decision

Story link: US dollar weaker ahead of Fed rate decision

The US dollar weakened Wednesday ahead of a decision by the US Federal Reserve on interest rates, due later in the day.

Expectations are that the Fed will cut US interest rates by half a percentage point, to 1 percent, at the end of its meeting today.

Helping other currencies to gains against the greenback were comments by German Chancellor Angela Merkel that a stimulus package for her country will be announced soon and a feeling by traders that yesterday’s declines by the yen were too steep to maintain.

At just before noon in New York the dollar declined to $1.2927 to the euro while the yen gained on the US currency to ¥97.475 even as the yen weakened to ¥126.0059 to the euro.

The pound saw gains on the news that more home mortgages were approved in the UK in September than in August.

Even though approvals remained near historic lows, there were 1,000 more approvals in September to a total of 33,000.

In late morning trade in New York, the pound traded at 79.39p to the euro while it took $1.6323 to buy a pound, representing a gain of 5 percent by the pound versus the greenback in two days.

At the same time, the yen fell to ¥159.1132 in relation to the pound.