Dollar weaker on deficit worries

With most foreign exchange markets closed for the May Day holiday - the major exceptions being the United States and Japan - the US dollar hit a year-long low in relation to the euro and was a low as it has been in seven months against the Japanese yen. Problems besetting the dollar include concerns over the huge budget and fiscal deficits in the US and the ongoing dispute with Iran over its nuclear program. The declines in the dollar came as investors were waiting for the release of new data on inflation, manufacturing, and personal income and spending in the United States.

The yen surged due to buying by foreign hedge funds and investment banks, adding 1 percent to ¥113.10 in relation to the US dollar. The euro gained 0.2 percent on the greenback, to $1.2626. Sterling was 0.5 percent higher versus the US dollar to $1.8269, while the Swiss franc was up by 0.4 percent against the dollar and the Canadian dollar was up 0.3 percent versus its US counterpart, to a 28-year high.

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