Speculation on the Federal Reserve’s willingness to ease monetary policy is directly related to the dollar’s decline to its lowest level in six weeks against the euro, dampening further demand on U.S. assets.
The dollar fell against 14 of its 16 major counterparts on the news that the “additional accommodation will be provided if needed” due to slowed recovery and sluggish job market.
The clear indication that the Federal Reserve is heading toward further monetary easing was enough to spur currency traders
to dump the dollar.
The dollar fell to $1.3295 per euro as of 10:34 a.m. in Tokyo from $1.3264 yesterday in New York, after dropping to $1.3312, the weakest since Aug. 6. The greenback declined to 84.89 yen from 85.09. The euro was at 112.92 yen from 112.87.
