Forex - Dollar hits record lows on US growth worries
The Dollar fell to an all-time low versus the Euro for a third straight day on Thursday after Federal Reserve Chairman Ben Bernanke warned some small US banks could fail and flagged further interest rate cuts. He also said the central bank was in a more difficult position now to respond to a slowing economy than it was in 2001. Lower interest rates will further erode the appeal of Dollar-denominated securities at a time when the European Central Bank is not seen easing monetary policy any time soon and countries like Australia are raising rates.
The dollar has been under pressure since the Fed began cutting rates, pushing benchmark overnight lending rates down by 225bp since mid-September to 3%.