The dollar fell to a record low against the Euro as the yield advantage on two-year German government debt over Treasuries widened to the most in 15 years.
The U.S. currency declined for a fourth day against the Euro as the European Central Bank will probably keep interest rates at a six-year high today to combat inflation. The dollar also declined against the yen on speculation an industry report on home sales will spur Federal Reserve Chairman Ben Bernanke to further lower borrowing costs.
“Mr. Bernanke, with his monetary policies, he will destroy the U.S. dollar,” Marc Faber, with $300 million under management at Hong Kong-based Marc Faber Ltd., said in an interview with Bloomberg Television. The publisher of the Gloom, Boom & Doom report predicted U.S. rate cuts will spur inflation.
The U.S. currency fell to $1.5307 per Euro, the weakest since the single currency’s debut in 1999, before trading at $1.5295 at 7:47 a.m. in London from $1.5265 in New York yesterday. The dollar slid to 103.72 yen from 104.01 yen. Against the Swiss franc, it was at 1.0343 from 1.0366. It declined to a record low of 1.0309 on March 3.
The ECB will keep interest rates at 4 percent, according to a survey of economists. The central bank will release its decision at 1:45 p.m. today in Frankfurt. Needless to say I am axiously awaiting this news release as it will dictate whether I should close my long positions for now or whether I should keep them open and ride this uptrend as far as I can.
I for one am most certainly taking advantage of the dollar’s weakness by holding a long position on the Euro. If you find currency trading interesting I’d definitely encourage you to check out the “Forex” category here on my blog or visit my other blog dedicated only to Forex trading.