Dollar mixed on rate cut speculation

The dollar finished mixed Wednesday against other major currencies amid renewed speculation about a possible further interest rate cut from Washington.

The dollar fell against the euro and British pound, but edged up against the Japanese yen.

In late New York trading, the euro rose to $1.4132 from $1.4098 late Tuesday.

The British pound rose to $2.0416 from $2.0355 in New York, while the dollar rose slightly to 117.25 Japanese yen from 117.19 yen on Tuesday.

The American currency continued to slip against the Canadian dollar. The U.S. dollar bought 98.14 Canadian cents Wednesday, down from 98.34 late Tuesday. The Canadian currency, or "loonie," has been rising steadily against the U.S. dollar, achieving one-to-one parity for the first time in almost 31 years on Sept. 20.

The euro had been trading about two U.S. cents off its all-time high of $1.4282, set Oct. 1, before the release on Tuesday of minutes of the Federal Open Market Committee. The minutes led many to speculate that another interest rate cut was being considered in the United States and sent the dollar into a tailspin.

"With a clear suggestion that we're going to see further rate cuts from the Fed in due course, the dollar has slipped back once again," said James Hughes, a market analyst with CMC Markets.

Lower interest rates, used to jump-start the economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.

The dollar's recent decline began in earnest when the Fed decided last month to cut its benchmark interest rate by more than expected to 4.75 percent in reaction to the U.S. subprime mortgage debacle.

The recent rise of the euro, which means that Americans pay more for European imports, has raised calls from politicians for the European Central Bank to try to do more to restrain it down in order to avoid economic slowdown.

In other New York trading, the dollar nudged up to purchase 1.1840 Swiss francs from 1.1839 Tuesday.