Dollar Eases Against Yen and Euro On Speculation Fed Will Raise Rates
NEW YORK -- The dollar fell against the yen and euro in line with early declines in stocks and bonds, after a stronger-than-expected manufacturing report increased speculation Federal Reserve will raise interest rates to cool the economy.</br></br>While the Dow Jones Industrials Average ended up, it spent most of the day in negative territory. As U.S. assets show weakness, "there are certain concerns by market participants about whether the U.S. is the place to put money," said Jeffrey Yu, vice president at Sanwa Bank in New York. "The idea is, the U.S. can't get any better so it's time to sell some dollars."</br></br>The dollar's recent declines put it more than four yen below its 1999 high of 124.75 yen reached less than two weeks ago.</br></br>But in the view of Alex Beuzelin, market analyst at Ruesch International in Washington, it is still too early to tell whether sentiment on the dollar has shifted. "The U.S. economy continues to grow. Inflation pressures so far remain benign," he said.</br></br>"With the implication of tighter Fed policy, the dollar tends to track stocks and bonds. But over the medium term and longer term, higher interest rates are dollar-supportive," he added.