Dollar down on interest rate speculation

The US dollar declined in relation to the euro Monday on the news that new home prices were at a 12-year low in December and as investors expected that the Federal Reserve will cut interest rates again this week after its surprise rate cut last week.

In early afternoon trade in New York, the dollar traded at $1.4788 to the euro and at $1.9830 to the pound while it was at ¥106.7600 in relation to the yen.

The yen remained about the same versus the greenback, but it weakened against the euro to trade at ¥157.8767 to the shared currency while it traded at ¥211.7103 to the pound.

The pound weakened versus the euro, to 74.57p to the euro, on declines in the equities markets and on sentiment that the Bank of England’s Monetary Policy Committee will cut interest rates when it meets next week.

The Swiss franc gained on the US dollar, the Brazilian real and the South African rand as investors fled risk.

The franc traded at SFr1.0892 to the greenback, while 1 franc was worth R$1.6359 and R6.102.

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