US dollar weakens versus euro, yen

The US dollar declined in relation to the euro and the yen Wednesday on concerns that an announced government bailout of US insurer American International Group (NYSE: AIG) will not do much to help the credit crisis, while the US currency was also hurt by the news that housing starts were down in August and building permits for future starts were down even more.

At late morning in New York, the dollar traded at $1.4135 to the euro while it took ¥104.6650 to buy a dollar and the yen strengthened to ¥147.9439 to the euro.

The pound fell in relation to the euro on big declines for mortgage bank HBOS (LSE: HBOS) and after UK unemployment was reported up in August.

At last report, the pound was trading at 78.87p to the euro.

The Brazilian real was down against the US, falling as much as 3.6 percent versus the greenback during the session and lately trading at R$1.8170 to the dollar despite assurances from Brazil’s finance minister that there is very little risk that US credit problems will spread to Brazil.

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