Dollar Little Changed Against Euro Before Fed's Rate Decision


The dollar was little changed against the euro amid speculation the Federal Reserve will cut interest rates by a half-percentage point today to prevent the U.S. from falling into recession.

The currency pared losses after a private report based on payroll data indicated companies in the U.S. added more jobs in January than economists forecast. A government report then showed the economy weakened more than forecast in the fourth quarter, reflecting a deepening housing slump.

The dollar traded at $1.4780 per euro at 11:26 a.m. in New York, compared with $1.4776 yesterday. The yen fell 0.2 percent to 107.29 against the dollar from 107.11 yesterday and 0.2 percent to 158.60 against the euro from 158.27.

The U.S. Dollar Index traded on ICE Futures in New York, which tracks the dollar against six major currencies, fell to a two-week low of 75.34 today. The index dropped to 74.48 on Nov. 23, the weakest since the gauge started in 1973.

A weakening dollar has raised the cost of the Persian Gulf region's imports and pushed inflation to record levels, adding pressure on countries to revalue their currencies or drop their dollar pegs.


TradingEconomics.com, Bloomberg
1/30/2008 9:26:53 AM