Wednesday, April 27, 2011

Dollar Hits 16-Month Low Versus Euro on Fed Stimulus

Dollar Hits 16-Month Low Versus Euro on Fed Stimulus ; The dollar fell to a 16-month low against the euro as the Federal Reserve's pledge to keep interest rates near zero to stimulate growth spurred investors to seek out higher-yielding assets.

New Zealand's dollar dropped for the first time in three days after Reserve Bank Governor Alan Bollard left interest rates at a record low and said the economic outlook "remains very uncertain." The yen declined to the lowest in two weeks against the euro as Asian stocks extended a global rally.

"The Fed is being perceived as very dovish, with rates likely to stay low for a long time," said Michiyoshi Kato, senior vice president of foreign-currency sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second-largest bank by assets. "Everyone is taking on risk, which is leading to selling of the dollar and the yen."

The dollar dropped to $1.4838 per euro as of 10:41 a.m. in Tokyo from $1.4788 in New York yesterday, after earlier touching $1.4847, the weakest since Dec. 8, 2009. The U.S. currency declined to $1.6689 per pound from $1.6627, after reaching $1.6704, the lowest since Dec. 3, 2009.

The yen was at 81.94 per dollar from 82.16. Japan's currency fell to 121.57 per euro from 121.47, and reached 121.84, the least since April 13. Read More...
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