Geithner comments affect USD

The US dollar weakened in relation to the euro and the yen Wednesday, but by midday in New York it had recovered some of its declines on comments from US Treasury Secretary Timothy Geithner.

The dollar faltered after Mr. Geithner said that the US would be open to enlarging special drawing rights of the International Monetary Fund, a development which would negatively affect the dollar, but the greenback recovered slightly when the Secretary said he believes the dollar will retain its status as the world’s reserve currency.

In midday trade in New York, the dollar traded at $1.3539 to the euro and the shared currency was worth ¥132.2773, while at the same time the yen traded at ¥97.7 to the greenback.

The euro was aided by a new Ifo institute survey which revealed that while German business sentiment was at its lowest in over 26 years in March, the numbers were much as analysts expected they would be.

The Norwegian krone weakened versus the euro and the US dollar Wednesday after Norges Bank, Norway’s central bank, cut the rate of interest earned by deposited funds by half a percentage point to 2 percent.

At midday in New York, the krone traded at kr8.8132 to the euro and at kr6.5059 to the greenback.

Meanwhile the South Korean won strengthened on a statement that the South Korean government will spend 17.7 trillion won ($13.3 billion) on economic recovery by the middle of the year.

The won traded at won1,362.4 to the US currency at just past noon in New York.

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