US focus: Dollar declines amid concern about slowdown in economy

US dollar renewed its decline amid concern that crafted agreement between Barack Obama and congressional leaders to raise the federal debt ceiling and spending reduction may lead to slowdown in economic recovery. Today Senate approved the debt limit hike bill. According to the plan, the U.S. debt limit will be raised by at least $2.1 trillion and cut federal spending by $2.4 trillion.
European stocks tumbled to the lowest level in 11 months amid concern that a slowdown in the world’s largest economy may derail global growth. Another pressure for the currency is surging bond yields in Italy reawakened concern that the region’s debt crisis will worsen amid slowing global growth. Italy’s 10-year yield jumped to the most since 1997.
The Swiss franc climbed to a new life-time high today. It was supported by “save haven” status and beating statistics on Swiss SVME PMI and retail sales.
The Australian dollar sheds today after the nation’s central bank kept its main interest rate unchanged.
The yen remain under pressure amid speculations Japan will intervene in currency markets. Today Japanese Finance Minister Yoshihiko Noda said the nation’s currency is overvalued and he’s watching markets closely.