The dollar fell to the lowest level in two weeks versus the euro on speculation the Federal Reserve will keep cutting its benchmark interest rate, widening the U.S. yield disadvantage with Europe.
The dollar's decline started after the governor of the Bank of France, Christian Noyer, said there is cause for ``optimism'' about economic growth in the euro region. Brazil's real rose to an eight-year high as a boom in exports and the highest inflation-adjusted bond yields in emerging markets lured investors. The pound fell to a one-month low against the euro.
``The U.S.'s deteriorating yield outlook, combined with its worsening underlying fundamentals, is weighing on the dollar,'' said Omer Esiner, a foreign-exchange analyst at currency-trading company Ruesch International Inc. in Washington. ``The U.S. economy is slowing at a very fast pace and that will continue to fuel further dollar-negative interest rate cuts.''
The dollar fell to $1.4726 per euro at 4 p.m. in New York, from $1.4658 yesterday. It declined to as low as $1.4757, the weakest since Feb. 5. The yen was little changed at 158.57 per euro, from 158.63. The dollar declined to 107.68 yen, from 108.23.
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