U.S. Dollar Drops on Bleak U.S. Economic Outlook
The U. S. Dollar fell today, hobbled by a bleak outlook for the economy of the United States as well as the move by the U.S. Federal Reserve bank which released additional liquidity into the U.S. banking system. However, the Swiss Franc rose on geopolitical risks because of the air strikes by the Israeli warplanes on the Gaza Strip over the past three days. The Pound Sterling continued its downtrend, slipping to a record low versus the Euro and a group of currencies in early trading in London, as bleak economic data and expectations that interest rates in the United Kingdom will fall below interest rates in the Euro zone negatively impacted the Pound Sterling.
According to David Powell of Bank of America, London, investors are seeing the U.S. Dollar trend broader because of weakness in the U.S. currency as a result of the Federal Reserve’s liquidity injection.
On December 29, 2008 by 08:40 GMT, the U.S. Dollar had dropped by 1.3% against the Euro and traded at $1.4248 and also dropped by 1.2% against the Swiss franc and traded at 1.0555 Francs. Against the Japanese Yen, the U.S. Dollar fell by 0.2% and traded at 90.43 Yen.