Dollar holds near lows as markets mull rate cut by Delia Cruceru

After the Federal Reserve's rate cut, the dollar fell to a record low against euro, as investors expect more rate cuts in the future. This year, the dollar has lost 5.5 percent in front of the European currency, especially after the rate cut made by the Feds. It is the 15 year low of dollar against major currencies, felling to 79.091, its lowest since 1992, but recovered to 79.229 by 0808 GMT. The European currency touched Wednesday a record of 1.3988 dollars and Tuesday it ended at 1.3976 dollars. But the dollar rose against the Japan's currency, to 116.07 yen from 116.05 yen, because of the national Bank of Japan decision to hold the rates unchanged. "The lower interest rate means the dollar has lost more support," said Laura Ambreseno, currency strategist at Morgan Stanley. "I think the move will help other central banks get back on to a hiking path as this boost for the U.S. economy should help the rest of the world maintain strong growth." Even the New Zeeland dollar registered a hit against the U.S. dollar climbing with 0.6 percent to $0.7300. "The market is taking a break. The dollar is losing interest-rate support, and I think $1.40 against the euro is within reach this week," said Kathy Lien, chief currency strategist at DailyFX.com in New York.

related story: http://uk.news.yahoo.com/afp/20070919/tbs-forex-us-8cc5291_1.html

by Delia Cruceru for PocketNews (http://pocketnews.tv)

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