NEW YORK, June 9 (Xinhua) -- The dollar fell against major currencies on Tuesday as investors bet that recovery of global economy will remove safety haven demand for the dollar.
The U.S. currency has been a refuge in the past months, getting stronger on bad news. It is expected to lose its attraction for safety as more signs showed that economy is on the track to recovery.
The dollar rose across the board on Friday after a report showed much better than expected U.S. payroll in May. Investors have expected that the U.S. Federal Reserve may raise interest rates earlier than expected. But the expectations pulled back on Tuesday.
"Investment is slowly leaking out of the dollar, into emerging markets and other higher-yielding countries on signs of a green-shoot recovery," said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., the world's largest custodial bank. "We are in a long-term trend of a controlled decline in the dollar."
Goldman Sachs Group Inc. advised buying the euro versus the dollar as risk aversion eases, prices of commodities rebound and talk of alternative reserve currencies undermine confidence in the greenback. The financial institution recommends taking a long position in the euro against the U.S. dollar "with a stop on a close below 1.3720 for an initial target of 1.45."
The U.S. government said on Tuesday that 10 of the nation's biggest banks got approval to repay a combined 68 billion dollars of bailout money. The
Obama administration hopes that money paid back into the 700-billion-dollar bailout fund by healthy banks will show that its financial recovery programs are working.
The euro bought 1.4086 dollars in late New York trading compared to 1.3891 dollars it bought late Monday. The pound rose to 1.6340 dollars from 1.6045 dollars.
The dollar fell to 1.1000 Canadian dollars from 1.1183 Canadian dollars, and fell to 1.0777 Swiss francs from 1.0917 Swiss francs. It fell to 97.37 Japanese yen from 98.40 Japanese yen.
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