NEW YORK, Nov. 22 (UPI) -- The U.S. dollar was being hammered Wednesday by predictions that slowing economic growth next year could mean a Federal Reserve interest rate cut.
By late morning, the dollar had fallen to 116.70 yen from 117.80 as the euro climbed to $1.2920 from $1.2849.
And that, in turn, left the futures price of gold -- which often moves against the dollar -- up $2.70 to $631.40 an ounce, its highest level since Nov. 10, MarketWatch said.
"Dollar weakness continues to boost sentiment in gold with the yellow metal building for a test of the $628-$630 resistance band," said James Moore, an analyst at TheBullionDesk.com.
Traders were selling the greenback after White House economists Tuesday gave their latest outlook for 2007. They lowered their prediction for next year's gross domestic product from 3.6 percent to 2.9 percent, thanks largely to a weaker housing market.
That expected slowdown may prompt the central bank to cut interest rates to avoid a recession. And because the dollar follows the interest rate of the benchmark 10-year Treasury, the U.S. currency's prospects are falling.
In addition, the massive U.S. balance of trade deficit is cheapening the dollar.