International payments to US boosted by dollar slide

The recent weakening of the US dollar has continued, in a trend which could benefit UK residents making international money transfers.

Yesterday (November 25th), the greenback slid to a year-long low against the euro and dropped by 0.7 per cent against the pound.

This morning, the dollar also reached a 14-year low against the yen.

Reasons for the recent currency trend include the low interest rate environment in the US - with the Federal Reserve holding rates at near zero.

Minutes from the Federal Open Market Committee (FOMC) also suggested this week that the low rates would be maintained over the next few months at least.

Some investors are also concerned about America's economic prospects, even though the world's largest economy recently returned to GDP growth.

Neil Looker, chief FX dealer at City Index, commented: "The main catalyst behind [the dollar/euro move] was a rather dovish FOMC Minutes ... This seemed to give the FX market the green light to continue selling the dollar."

Speaking to the BBC, Yutaka Miura at Mizuho Securities added: "This yen strengthening is caused by dollar selling rather than yen buying, so this is not something Japan can handle itself."

Posted by Richard Planner