2010.09.2816:15:00UTC+00Dollar Falls Further As Consumers Turn Skittish

The dollar continued to slump versus the euro and yen on Tuesday, as another disappointing reading on US consumer confidence dented recovery hopes.

The economy has tailed off after a decent start to the year, and the Federal Reserve is expected to offer further support measures, at the expense of the dollar.

US confidence saw a substantial retreat in September due in large part to a notable deterioration in consumer expectations.

The Conference Board said its consumer confidence index fell to 48.5 in September from a downwardly revised 53.2 in August. Economists had expected the index to edge down to 53.0 from the 53.5 originally reported for the previous month.

Looking at housing, the S&P/Case-Shiller 20-City Composite Home Price Index increased at an annual rate of 3.2 percent in July compared to a 4.2 percent increase in June. Economists had expected the index to increase at an annual rate of about 3.3 percent.

The dollar dropped another penny to a 5-month low of 1.3590 against the euro. Back in the spring, the dollar hit a 4-year high of 1.1805 before falling sharply.

With no sign that Japanese authorities are intervening again in the the currency markets, the dollar dropped below Y84 against the yen. The buck hit a 15-year low of 82.86 earlier this month, before officials stepped in to temporarily drive down the yen.

The dollar dropped to a fresh 2-year low of CHF 0.9760 against the swiss franc.

Global growth may come in weaker than expected in the second half of this year and this sluggishness will persist into early 2011, John Lipsky, First Deputy Managing Director of the International Monetary Fund, said.

Copyright(c) 2010 News.com, Inc. All Rights Reserved