- Obama not worried about Ebola at upcoming African summit in D.C.
- Obama: ‘We tortured some folks’ after 9/11
- Obama administration asked whole D.C. Circuit to take on major Obamacare case
- Mark Levin: Topple GOP leadership or country will ‘unravel’
- Massachusetts to let police chief deny gun buys to those deemed unfit
- John Kerry condemns attack on Israeli soldiers, kidnapping
- U.S. starts to evacuate American Ebola patients from West Africa: Report
- Geraldo slammed as ‘dummy’ for backing Clinton’s bin Laden claim
- Israeli spokesman: No need to debate who broke the cease-fire
- 35 Palestinians killed; Israeli officer missing
Dollar tumbles broadly as Fed moves expected
Question of the Day
NEW YORK (AP) — The euro on Wednesday moved above $1.39 for the first time since February, while the yen struck a 15-year high.
The dollar is sliding broadly because investors expect the Federal Reserve will increase its support for the U.S. economy, driving down interest rates and dinging the currency’s appeal for investors.
The International Monetary Fund forecast Wednesday that the U.S. economy will grow just 2.6 percent this year, below its previous estimate of 3.3 percent, and that growth will slow to 2.3 percent in 2011.
A private jobs survey by payrolls company ADP said U.S. employers cut jobs in September, the first time in seven months.
A measure of the dollar against six actively traded currencies is trading at its lowest level since January after falling nearly 7 percent in September and October.
Fed members have said they are willing to offer the economy more relief. Buying U.S. government debt would lower interest rates, which the Fed hopes would trigger more economic activity. But lower rates mean that assets bought in dollars offer investors lower returns, weighing on the dollar.
In midday trading in New York, the euro jumped to an eight-month high of $1.3929 from $1.3850 late Tuesday, while the dollar slid to a 15-year low of 82.77 Japanese yen, down from 83.18 yen Tuesday.
The yen last hit a 15-year high on Sept. 15, just before the Bank of Japan intervened in foreign exchange markets to weaken the yen.
Traders are wary of a global “currency war,” in which countries try to weaken their currencies to boost exports. Japan did so this week with plans for a massive stimulus package and interest rate cut. Brazil also tried to weaken the real. European authorities are not expected to try to launch more support for the economy, however, and that has helped increase the value of the euro.
Treasury Secretary Timothy F. Geithner said in a Wednesday speech ahead of meetings of the IMF and World Bank this weekend that countries with “undervalued” currencies should let them appreciate. Although he did not name China, the speech was aimed primarily at the world’s second-largest economy.
Mr. Geithner said the problem was that when large economies kept their currencies undervalued, other countries takek similar actions to weaken their currencies in order to compete in global trade. That increases risks of inflation and asset bubbles in emerging economies, which could disrupt the recovery in the world economy.
In other trading Wednesday, the British pound edged up to $1.5905 from $1.5901.
The dollar also tumbled to its weakest point against the Australian dollar since July 2008.
TWT Video Picks
By Orrin G. Hatch
Procedural changes impede the chamber's traditional deliberative function
- U.N. condemns Israel, U.S. for not sharing Iron Dome with Hamas
- Border agents cleared of civil rights complaints from illegal immigrant children
- Obama military strategy too weak for future security, panel reports
- Ben Carson takes major step toward presidential campaign
- Porn-surfing feds blame boredom, lack of work for misbehavior
- Pentagon wants extra $19M to equip, train Ukrainian troops
- 'Big Bang' star Mayim Bialik helps send bulletproof vests to IDF
- Feds raid S.C. home to seize Land Rover in EPA emission-control crackdown
- Australia issues arrest warrant for men believed to be homegrown ISIL terrorists
- Iraq Christians get meeting with top Obama aide
Top 10 U.S. military helicopters
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors