Dollar falls as interest rates up

The U.S. dollar fell against the euro, the yen, sterling, and the Canadian dollar Wednesday after Tuesday’s action by the U.S. Federal Reserve to raise the interest rate and amid continuing speculation that the revaluation of Chinese currency may be close.

The dollar fell 0.6 percent in relation to the euro to $1.2938. It fell 0.5 percent against sterling to $1.8999, and 0.3 percent in relation to the Canadian dollar to C$1.2502. The U.S. dollar fell 0.8 percent against the yen, to ¥104.21, before recovering to ¥104.68.

Speculation about China’s possible revaluation of its currency also spurred the South Korean won to rise 0.7 percent in relation to the dollar, to Won 995. The Taiwan dollar gained 0.9 percent against the U.S. dollar, to T$31.00. This was a six week high.

The dollar also fell in relation to other world currencies. The South African rand rose 1.4 percent in relation to the dollar, to R5.9853, while the Brazilian real was up 0.5 percent on the dollar to R$2.4758, a thirty-five month high.

Discuss this in the Finance Markets forums

Story link: Dollar falls as interest rates up