Dollar in freefall as Fed rate cut eyed

Greenback sinks anew against the yen, euro on expectations the Fed will lower rates next week.

TOKYO (AP) -- The dollar fell against the yen and the euro in Asia Monday on speculation that gloomy economic conditions in the U.S. will prompt the Federal Reserve to slash interest rates next week.

The dollar was trading at 102.00 yen midafternoon Monday, down from 103.09 yen late Friday in New York. The euro rose to $1.5382 from $1.5335.

"Bad news related to the U.S. economy and its financial system will likely keep cropping up, and that could send the dollar to 100 yen in the near term," said Masanobu Ishikawa, manager of foreign exchange at Tokyo Forex and Ueda Harlow.

Traders said expectations are growing that the Federal Reserve would cut interest rates by as much as 75 basis points to 2.25% at its policy planners' next meeting March 18.

Behind the dollar's drop was much weaker-than-expected U.S. nonfarm payrolls data for February. Later in the week the market will be watching more U.S. economic data - February retail and food sales data due out Thursday and the same month's consumer price index slated to be released on Friday - to get a better sense of how badly the American economy is doing.

In spite of the U.S. currency's slide to nearly 100 yen, traders say Japanese authorities aren't likely to intervene in the currency market to weaken the yen because such action might displease the U.S., whose exporters benefit from a weak dollar.

Against other Asian currencies, the dollar was higher. It rose 1.31% against Philippine peso to 41.140.

cnn