The dollar fell versus the euro on Wednesday after Federal Reserve Chairman Ben Bernanke said there was a possibility the U.S. economy could dip into a brief recession this year.
The dollar fell to $1.5688 per euro at $4:45 p.m. in New York from $1.5614 on Tuesday. The yen traded at 102.40 against the dollar compared to 101.85 yesterday. Meanwhile, the euro gained against the yen, trading at 160.67 yen compared to 158.99.
Federal Reserve chairman Ben Bernanke said in testimony before Congress today he expected small growth in 2008, which could go negative.
It now appears likely that real gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly, he said.
Futures traders on the Chicago Board of Trade are betting that the Fed will cut interest rates by 25 basis points when it meets again on April 30. There is an 88 percent chance of that cut according to futures contracts on the Board. The chances of a 50 basis point cut is 12 percent.