Dollar slides on bleak corporate outlooks

NEW YORK — The dollar slid against the euro, the pound and the yen Wednesday as U.S. companies gave bleak profit outlooks and markets anticipated rate cuts in Europe.

The 16-nation currency rose as high as $1.3747 before drifting back to $1.3658, compared with the $1.3523 it bought late Tuesday in New York trading. Meanwhile, the British pound rebounded to $1.5107 from $1.4939 Tuesday, as analysts reiterated that the Bank of England was set to cut interest rates from 2 percent Thursday.

The dollar slipped to 93.02 Japanese yen from 94.01 yen late Tuesday.

Time Warner Inc. said Wednesday it expects to record a fourth-quarter $25 billion impairment charge for its cable, publishing and AOL units that will lead to an operating loss for the period and a loss for the full year. Meanwhile, computer chip maker Intel Corp. said it expects fourth-quarter revenue to drop 23 percent, below prior estimates.

The news came a day after reports showed that pending home sales fell to the lowest level on record and factory orders continued to decline, while aluminum producer Alcoa Inc. said late Tuesday it is reducing its global work force by 13 percent.

"A round of downbeat economic data out of the U.S. yesterday afternoon served to turn investor sentiment against the dollar," said James Hughes of CMC Markets in London.

The euro managed to hold steady despite a moderate uptick in unemployment in Germany, Europe's biggest economy, too.

The Federal Labor Agency said that German unemployment rose to 7.4 percent in December from 7.1 percent in the previous month as the economic crisis began to bite.

Investors expect that the European Central Bank, which meets Jan. 15, will likely continue cutting interest rates for the euro zone from its current 2.5 percent, after Eurostat's provisional estimate of consumer price inflation found that it fell from 2.1 percent to 1.6 percent in December.

Cutting interest rates can undermine a currency as investors seek higher returns elsewhere.

In other trading midday Wednesday, the dollar fell to 1.0973 Swiss francs from 1.1177 it bought late Tuesday, but rose to 1.1867 Canadian dollars from 1.1796.

Back To Top

	Euro down against US dollar	Associated Press	Mon Jan 5	0
	Japan stocks tumble on US stock losses, higher yen	Associated Press	Tue Jan 6	0
	US dollar mostly higher in Europe	Associated Press	Mon Dec 29	0