The dollar has declined against 14 of the 16 most active currencies this year as the Fed lowered borrowing costs three times because of a slumping housing market. A report today will probably show sales of existing homes in November stayed at the lowest level since the National Association of Realtors began keeping the records in 1999.
``The U.S. economy is still slowing,'' said Lee Wai Tuck, a currency strategist at Forecast Singapore Ltd. ``The Fed is likely to cut rates in January. It puts the dollar under downward pressure.''
The dollar was at $1.4734 per euro at 9:27 a.m. in Tokyo, down 11 percent this year. It reached $1.4967 on Nov. 23, the lowest since the euro begun trading in 1999. The U.S. currency lost 5.7 percent this year to 112.27 yen and reached a two-week low of 112.25 yen. Japan's currency traded at 165.43 per euro, having declined 5.3 percent to head for an eighth straight annual loss.
The dollar may decline to $1.4780 per euro and 112.10 yen today, Lee forecast. Currency trading will be less than 50 percent of normal levels today because of the holiday in Japan, Indonesia, Thailand and the Philippines, Lee said.
Odds the Fed will cut its target rate for overnight bank loans a quarter-percentage point from 4.25 percent at its Jan. 30 meeting increased to 90 percent from 80 percent a week earlier, according to futures on the Chicago Board of Trade.
The level of existing home sales in November was probably 4.97 million, unchanged from the month before, according to the National Association of Realtors which will release the report at 10 a.m. in Washington. A report on Dec. 28 showed sales of new homes in the U.S. fell to a 12-year low.
