March 12 (Bloomberg) — The dollar fell against the euro and the yen on speculation the Federal Reserve’s plan to provide funds to banks won’t be enough to break the gridlock in money- market lending and stem credit losses.
“Read the need for such new measures as being a symptom of what ails the world and not a panacea for its problems,” said David Simmonds, the London-based global head of currency research at Royal Bank of Scotland Plc, the world’s fourth-biggest foreign-exchange trader. “Stay short dollars.”
The U.S. currency also declined as traders wagered the Fed will cut rates by as much as three quarters of a percentage point to prevent a recession, while the European Central Bank keeps borrowing costs unchanged. The yen advanced against the dollar and the euro after a government report showed Japan’s economy grew faster than forecast in the fourth quarter.