Dollar Falls Against Euro

BERLIN — The dollar fell against the 13-nation euro Thursday amid renewed speculation about a possible further interest rate cut from Washington.

In morning European trading the euro was at $1.4184, up from $1.4132 late Wednesday in New York.

The British pound fell to $2.0368 from $2.0416 in New York on Wednesday, while the dollar remained unchanged against the Japanese currency at 117.25 yen.

The euro had been trading about two U.S. cents off its all-time high of $1.4282, set Oct. 1, before the release on Tuesday of minutes of the Federal Open Market Committee, which led many to speculate another interest rate cut was being considered in the United States and sent the dollar into a tailspin.

Lower interest rates, used to jump-start the economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.

The dollar's recent decline began in earnest when the Fed decided last month to cut its benchmark interest rate by more than expected to 4.75 percent in reaction to the U.S. subprime credit debacle.

The recent rise of the euro, which makes exports from the euro zone more expensive in the U.S. and elsewhere, has raised calls from politicians for the European Central Bank to try to do more to slow it down in order to avoid economic slowdown.

On Wednesday, German Economy Minister Michael Glos said that financial market turmoil had increased risks to foreign trade, although for now no serious implications had yet been identified for Europe's largest economy.

"The German economy is still enjoying a strong upward trend, despite clouds over the world financial markets," Glos said in a statement.

Back To Top

	Dollar Rises Against Euro	Associated Press	Mon Oct 8	0
	What the falling dollar means for you	MSN	Tue Oct 9	0
	US Dollar Lower in Europe	Associated Press	Tue Oct 9	0