US dollar gains on euro ahead of Senate vote

The US dollar gained on the euro Wednesday as demand for the dollar from foreign banks increased and in anticipation of a US Senate vote on a bailout plan for US banks.

In late morning trade in New York, the dollar traded at $1.4030 to the euro with the euro also hurt by expectations that the European Central Bank will hold interest rates in the Eurozone at 4.25 percent when it meets tomorrow.

The pound was weaker in relation to the dollar and the euro on new data showing that UK manufacturing activity contracted in September.

At around 11:30 a.m. in New York, the pound traded at 79.05p to the euro, while it took $1.7747 to buy a pound.

Meanwhile, the dollar weakened versus the yen on new numbers indicating that US manufacturing activity also contracted in September, with the yen trading at ¥105.58 to the US dollar in New York.

The Australia and New Zealand dollars were both weaker versus the greenback on investor expectations that their central banks will cut interest rates soon as well as on declines in commodities prices.

In the latest report, it took 79.05 cents US to buy an Aussie and 67.48 cents US to buy a New Zealand dollar, while the yen gained on the Australian currency, trading at ¥83.6823 to the Aussie but the kiwi strengthened in relation to the Japanese currency, to ¥71.387.

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