» Forex - US banking sector and worries about US economy put Dollar under pressure

A surprise first-quarter loss at Wachovia Corp, the fourth-largest US bank, suggested more credit market turmoil ahead, prompting traders to sell Dollars, mostly against the Euro and Sterling. That helped wipe out Dollar gains seen after finance officials from the G7 developed countries on Friday expressed concern about sharp currency fluctuations. In addition to Wachovia, Merrill Lynch & Co Inc and Citigroup Inc are due to report first-quarter results later in the week, and analysts say both banks may announce billions of dollars in write-downs.
The Fed has cut the benchmark interest rate by 300 basis points at 2.25% since credit turmoil began in late August and is likely to reduce it again when it meets later this month. The European Central Bank, meanwhile, has held rates at 4% for more than a year, and ECB Governing Council member Yves Mersch said Monday there is no room for rate cuts this year.

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