The dollar touched a two-week low versus the euro after the
world's biggest central banks said they will act to revive financial
markets, reducing demand for the greenback as a haven.
The yen dropped versus the New Zealand and Australian dollars as
the Federal Reserve, Bank of Japan and European Central Bank joined
global counterparts to reverse the seizure in credit markets, reviving
demand for higher-yielding assets. The dollar remained lower versus the
euro as U.S. initial jobless claims unexpectedly increased last week.
``We're seeing reassertion of the weakness feature in the dollar as we
get some breathing room,'' said Alan Ruskin, head of international
currency strategy in North America at RBS Greenwich Capital Markets
Inc. in Greenwich, Connecticut. ``There are really two forces running
against each other, repatriation flows and weak economic fundamentals
in the U.S.''
The Fed said in a statement on its Web site it authorized other central
banks to auction $180 billion in dollar funds to financial
institutions. The ECB will offer up to $40 billion for one day today
and increase the amount of dollars provided to European banks in
existing longer-term auctions, it said
The U.S. currency remained lower versus the euro as the Labor
Department reported that the number of Americans filing first-time
claims for unemployment benefits increased to 455,000 in the week ended
Sept. 13, from 445,000 in the previous week. The median forecast of 38
economists surveyed by Bloomberg News was for a drop to 440,000.
``We're seeing a modest rebound in risk appetite,'' said Adam Cole,
head of global currency strategy at RBC Capital Markets in London. The
intervention ``signals that they will do what they can to help us
through this situation,'' he said.