Dollar drops versus, euro, yen, Swiss franc

The US dollar declined in relation to the euro, the yen and the Swiss franc on Wednesday after seeing gains on Tuesday after the US Federal Reserve cut interest rates by three-quarters of a percentage point to 2.25 percent.

The day’s declines were spurred by worries that the Fed’s rate cuts since September will not be enough to rescue the credit markets and the wider US economy as well as on concerns that there will be more writedowns for US and European banks before the subprime mortgage mess gets better.

At nearly noon in New York, the US dollar traded at $1.5653 to the euro while it took ¥99.2850 or SFr1.001 to buy a US dollar.

The pound and the South African rand both declined, with the pound weaker against the euro and the US dollar following the release of the minutes from the latest meeting of the Bank of England’s Monetary Policy Committee and on declines for HBOS (LSE: HBOS), despite its insistence that it is not having liquidity problems and the rand dropping on fears that demand for high-yielding currencies will fade.

In late morning trade, the pound traded at 78.76p to the euro and it took $1.9876 to buy a pound while the rand was trading at R7.9935 to the US dollar and it took ¥12.420 to buy a rand.

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