Monday, 2 May 2011

Dollar Falls On Speculation the FED Will Leave Interest Rates at Record Low

The U.S. dollar fell against most of its major currency counterparts on Monday's trading session, on speculation the Federal Reserve will keep record-low rates after a report showed that the manufacturing growth has slowed down in April.

The dollar fell for the 10th straight day, the longest drop in 17 years, after the Institute for Supply Management said its factory orders index was at 60.4 for April, sliding from 61.2 in March.

In addition, the widening difference in interest rates between the U.S. and the European nations continues to play a significant part in the dollar's weakness, and the greenback is currently the world's worst-performing major currency the past three years.

Looking ahead to tomorrow, the most significant news event seems to be the British Manufacturing data, which is scheduled at 08:30 GMT. A positive result is likely to push the pound further up against the dollar.