Dollar Falls on Banks Support Expectations

U.S. dollarThe U.S. dollar along with the yen declined against almost all other major currencies today as the traders expect that the bank bailout plan will be adopted soon in the United States.

The dollar declined also because the Federal Reserve will end its two-day meeting today and will probably announce some additional measures to ease the credit conditions, providing further pressure on the greenback. The drop against the high-yielding currencies was also dictated by the Obama’s «bad bank» plan, which will include setting up the special institution to buy out the «toxic assets» from the U.S. banks.

The analysts note that the «bad bank» plan if approved and used in reality will cause the global stock markets to grow and such currencies as the U.S. dollar and the Japanese yen to fall considerably below their current levels.

EUR/USD rose from 1.3182 to 1.3261 as of 9:37 GMT today after reaching as high as 1.3315. USD/JPY remained almost unchanged today rising from 89.11 to 89.22, while GBP/USD went up from 1.4115 to 1.4249. AUD/USD rose from 0.6633 to 0.6674.