Comments from Federal Reserve Chairman Ben S. Bernanke that the U.S. economy could possibly contract in the first half, caused the U.S. dollar to slide against the euro for the first time in three days.
"Bernanke confirmed what the market is feeling about the economy," said Samarjit Shankar, director of strategy for the global markets group in Boston at Bank of New York Mellon. "It put some pressure on the dollar."
Against the euro, the U.S. dollar dropped by 0.5 percent to $1.5695 in New York, down from $1.5614 yesterday. Other major currencies it fell against were the English pound, Brazilian real, Icelandic krona, Australian dollar, South African rand and the Norwegian krone.
Most traders say there is about an 88 percent chance the Fed will cut the lending rate by a quarter-percentage point on its April 30 meeting. They also say the chances of a half-percentage point cut stand at 12 percent.