Dollar follows other currencies down
5:38 PM Wednesday Aug 11, 2010

The New Zealand dollar dropped to a three-week low against the greenback today as investors struggled to assess a Federal Reserve plan to boost a flagging United States economy.

At 5pm the NZ dollar was at US72.00c, down from US72.38c at 8am and US72.26c at 5pm yesterday. It traded as low as US71.85c during the local session.

The Fed said it will use proceeds from its investments in mortgage securities to buy longer-term government debt.

This was seen as a light form of a "quantitative easing" scheme to pump money into the economy. The Fed kept interest rates unchanged and offered a gloomy outlook on the US economy.

The downgrade to the economic outlook "is a problem for the (US) dollar in general," said Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey.

More here.