Euro creeps up against dollar

The euro crept back up against the dollar on Tuesday, rising above USD1.46 after losing significant ground the previous day.

Photo: Euro creeps up against dollar

The euro rose as high as USD1.4633 before settling back to USD1.4605.

That was still well above the US$1.4554 it bought in New York late on Monday, when it lost more than a U.S. cent as investors, wary of market turmoil, backed away from investing in high-yielding currencies.

The British pound also recovered ground, rising to US$2.0663 from USD2.0595. The dollar slid to 109.69 yen from 110.05 yen.

The dollar is suffering from speculation that the U.S. Federal Reserve, which recently cut interest rates twice, may keep doing so even as its major European counterparts hold their rates steady or even increase them.

"So long as the (European Central Bank) continues to eye a rate hike as soon as next month, then the common currency is unlikely to find itself under much additional pressure on the downside," said Paul Jackson, a senior forex dealer at CMC Markets. The euro hit an all-time high of USD1.4752 last Friday.

Although lower interest rates can jump-start an economy, they can also weaken a currency as investors transfer funds to countries where they can earn higher returns.