By: Barbara ZigahThe U.S. Dollar slipped in early morning trading in New York, striking new multi-month lows versus the Japanese Yen, Pound Sterling and the common currency Euro on growing concerns that the pace of the economic recovery in the United States is slowing.
As reported at 9:21 a.m. (EST) in New York, the U.S. Dollar fell against the Japanese Yen to 85.94 Yen, a loss of .6% and a new 8-month low. Versus the Euro, the U.S. Dollar slipped to 41.3230, a loss of .4%. Against the Pound Sterling, the U.S. Dollar struck a new 6-month low, trading at $1.5940, a loss of .4%.
Analysts attribute the U.S. Dollar’s decline not only to the economic worries but also the falling yields on U.S. treasury bonds; the yield on a U.S. Treasury fell to 0.534%, a new record low. Yesterday, the Chairman of the U.S. Federal Reserve noted that, for the time being and given the fact that the American economy’s recovery is so lackluster, that interest rates needed to remain at their current lows.
Also working against the U.S. Dollar was a recent media report suggesting that the Federal Reserve may try to further stimulate the economy by increasing liquidity. Four month ago, the Federal Reserve halted the bond buying program which had been put in place to help the economy; reactivation of the program would be a sign to investors that the government is concerned over the pace of the recovery.