NEW YORK, MarketWatch (7/11) -- The U.S. dollar fell Wednesday as
investors focused on research suggesting that the Federal Reserve lower
its 6.5% unemployment-rate threshold for raising short-term interest
rates, which would effectively keep those rates near zero for longer
than currently expected. The research, led by Fed economist
William English and highlighted earlier this week by Goldman Sachs,
comes ahead of the U.S. October jobs report due Friday that is expected
to show a slight increase in the jobless rate, to 7.4% from 7.2%,
according to a MarketWatch poll. It also solidifies a continued message
from the Fed this year that an eventual slowing of its monthly bond
purchases, currently set at $85 billion, won’t immediately lead to a
rise in interest rates. The ICE dollar index, which measures the
currency against six rivals, dropped to 80.464 from late Tuesday’s
80.709. Likewise, the WSJ Dollar Index eased to 72.78 from 72.94. The euro firmed to $1.3521 from $1.3475 late Tuesday in North America, while the British pound rose to $1.6074 from $1.6047. The
European Central Bank is scheduled to release its monetary-policy
decision Thursday. Talk of an interest-rate cut this year was revived
after data showed that euro-zone annual inflation tumbled below 1% in
October, sharply lower than the ECB’s target. In other action,
Australian dollar rose to 95.13 U.S. cents from 94.93 U.S. cents,
recovering the 95-cent level after dipping below it as Reserve Bank of
Australia Gov. Glenn Stevens said the unit was “still uncomfortably
high.” The dollar bought ¥98.65, slightly more than ¥98.58 late Tuesday.
