Dollar dips against euro

The dollar dipped against the euro and yen on Monday on the eve of a key US interest rate decision.

In early European trading, the euro rose to $1.4677 from $1.4656 late on Friday in New York. And the dollar eased to 111.55 yen from 111.65 late on Friday. Market players were awaiting a Federal Reserve meeting on Tuesday when the US central bank was expected to cut its key interest rate by at least 25 basis points from the current level of 4.5 percent, dealers said.

It would be the third cut to the benchmark fed funds rate since September in response to the credit squeeze that has roiled world markets in recent months.

But speculation that the Fed might slash the rate by a hefty 50 basis points because of looming fears of a recession receded following better-than-expected US employment figures, dealers said. “The dollars could benefit if the Fed does deliver a 25bps given the more dovish expectation priced into the futures market,” Calyon analyst Mitul Kotecha said.

Read Complete Story