Dollar declines as traders wrangle over Fed rate cuts

The US dollar declined against the euro and the pound on Friday as traders continued to hotly debate whether the US Federal Reserve would continue cutting interest rates amid economic uncertainty.

The euro was swapping hands at US$1.4378 in late afternoon trading in New York, up from US$1.4320 late on Thursday.

The British pound was quoted at US$1.9841, up from US$1.9830 a day earlier.

Although the pound gained ground it has dropped below two dollars of late, marking its lowest levels against the US dollar since August.

The US dollar was meanwhile trading at ¥114.09, up from ¥113.09 on Thursday.

The US currency’s value has risen and fallen in the past week as traders have either bet up or discounted the odds of a fresh Fed rate cut.

The Fed has cut borrowing costs three times since September in a bid to underpin US economic momentum in the face of a prolonged housing slump, but analysts say rising inflationary pressures may soon put an end to the rate cuts.

The US Commerce Department reported earlier on Friday that a core US inflation gauge, which excludes volatile food and energy costs, bounced up an annual 2.2 percent last month, above the Fed’s comfort zone of between 1 percent and 2 percent.

In late New York trading, the US dollar stood at 1.1551 Swiss francs from SF1.1581 on Thursday.

AFP

RSS TrackBack URL

Translate: