Euro, Pound Slip Lower Against Dollar

The 15-nation euro, which expanded to include Malta and Cyprus on Jan. 1, bought US$1.4652 in midmorning European trading, slightly below the US$1.4682 it bought on Dec. 31 in New York, and well off its all-time high of US$1.4967 set on Nov. 23. Most markets were closed Jan. 1, a holiday in the U.S. and across the euro zone.

The British pound fell to US$1.9844 from US$2.0029 on Monday, while the dollar climbed to 111.58 Japanese yen from 111.54 on Dec. 31.

The dollar has been buffeted by worries over the health of the U.S. economy and three interest rate cuts by the U.S. Federal Reserve, which is trying to reduce borrowing costs to revive the nation's battered housing market. Investors think another rate cut may be on the way and could glean hints about such a move when the Fed releases the minutes from its last meeting.

Lower interest rates can jump-start a country's economy, but may weigh on the currency as traders look to invest in higher-yielding assets.

Later Wednesday, the U.S.-based Institute for Supply Management will release its manufacturing index.