Forex - Dollar fell on concern about further credit-related markets impacts - Forex Forum

The Dollar fell on Tuesday as talk of higher Euro-zone interest rates prompted investors to increase exposure to the Euro. Concern about further credit-related losses and their impact on financial markets also sent the Dollar tumbling against the low-yielding Yen and Swiss franc, while a record high in oil added to fears about surging price pressures.

Analysts are still concern about the credit crunch and even said the crisis would extend into 2009 and beyond, setting up three years of multibillion-dollar revenue losses.

Bank of Japan keeps its borrowing costs on hold at 0.50%, as expected, on Tuesday. The ECB has held its benchmark rate at 4% since last June as record oil prices have pushed inflation higher. The Federal Reserve, by contrast, has slashed rates from 5.25% to 2% since September but has since signaled a pause in its rate-cutting campaign.

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