The Dollar falls against a basket of currencies investor say manufacturing shran

The greenback fell against the euro before a U.S. report that may show the Philadelphia region’s manufacturing shrank for a ninth straight month, leading investors to believe that the Federal Reserve will keep interest rates low. The euro gained versus the sterling on speculation European Central Bank officials speaking tomorrow will signal they intend to refrain from cutting borrowing costs. The greenback declined as traders cut bets the Fed will raise its benchmark rate this year to a 45 percent chance from 64 percent odds a week ago. “Recent data have convinced market participants the Fed is unlikely to start raising rates anytime soon,” said Danica Hampton, a currency strategist in Wellington at Bank of New Zealand Ltd., the nation’s third-largest bank. “As a result, the dollar is under downward pressure.” The EUR/USD is currently trading at $1.3960 as of 8:48am, London Time.

The British pound fell sharply against the euro and the greenback on Wednesday on profit-taking following recent sharp gains and after Bank of England policymakers remained cautious on the UK outlook despite encouraging signs. A 1.5 percent fall in UK equities FTSE also dampened sentiment towards the UK currency as doubts crept in about whether the recent surge in optimism surrounding the UK was justified. Figures showing a much smaller-than-expected rise in the UK claimant count measure of unemployment failed to provide more than a very short-lived boost to sterling, which quickly tumbled to session lows against the dollar and euro. The GBP/USD is currently trading at $1.6400 as of 9:00am, London Time.

The Loonie dollar gained as crude oil rose and U.S. stocks pared losses, prompting investors to swap the safety of the U.S. dollar for riskier assets such as commodity-linked currencies. Canada’s dollar, known as the loonie, earlier touched the lowest level in almost a month as crude and stocks slid. “It is obvious that the market is desperately looking for direction,” Matthew Strauss, a currency strategist at RBC Capital Markets in Toronto, a unit of Canada’s biggest bank, wrote in a note to clients. “Foreign-exchange changes remain modest at best and the top Group of 10 performance spot is frequently changing hands between cyclical and commodity currencies and traditional risk-averse benefactors.” The USD /CAD is currently trading at $1.1330 as of 9:09am, London time.