The U.S. Dollar fell marginally lower against major currencies in early morning trading in Sydney on Tuesday. The currency remains under pressure as it fell to its lowest level against the Yen in nine weeks in New York because of concerns of the impact of the liquidity crisis has resurfaced.
Yesterday, Standard & Poor’s downgraded the credit ratings of Morgan Stanley, Merrill Lynch and Lehman Brothers and this caused the Swiss Franc and Yen to make large gains against the U.S. Dollar during overnight trading, and through early morning trading in Sydney.
On June 3, 2008, at 10:05 am (00:05 GMT) the U.S. Dollar traded at 104.38 Yen, compared to 104.50 Yen, while the Euro traded at $1.5541, compared to $1.5540, in late trading in New York.
According to analysts, investors have begun to move to safe haven currencies to take advantage of possible increases in interest rates to curb inflationary pressures as a result of higher oil prices. The forex market is in a precarious position, as investors will start to re-focus their attention on the direction of interest rates in the United Kingdom, United States, the Euro zone and Australia.