US dollar weakens against Aussie, other currencies

The Australian dollar reached its higher level in relation to the US dollar in 10 years on Monday as investors anticipated Tuesday’s meeting of the Reserve Bank of Australia, which is widely expected to raise interest rates. The Aussie added 1.2 percent versus the greenback to $0.8180 in mid-afternoon trade in New York.

Sterling also strengthened on the session even though the UK purchasing managers’ index fell from 55.4 in February to 54.4 in March, falling more than had been expected. In addition, the amount borrowed against equity by homeowners was up in the fourth quarter of 2006. With some analysts expecting another UK interest rate as soon as next week, sterling added 0.3 percent to £0.6761 against the euro and was 0.5 percent higher to $1.9780 versus the US dollar, a two-month high.

The euro also gained on the greenback, adding 0.1 percent to $1.3370 even though the Eurozone purchasing managers’ index was slightly lower in March.

The dollar was also lower in relation to the Japanese yen, dropping 0.2 percent to ¥117.60 as US manufacturing orders were weaker. The yen, meanwhile, was unmoved versus the euro at ¥157.30.

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