Dollar-Yen Forex at 3 year low: More rate cuts?

The dollar diplomacy seems to be breaking. There is nothing that is stopping the dollar from touching the record lows.
Despite so many measures, despite so many rate cuts, the dollar continued its decline and hit the 3 year low against the Japanese Yen.

These are strong signals that the Fed may go for another round of interest rate cut, anytime. The dollar declined to a three-year low against the yen on speculation the Federal Reserve will signal plans to keep cutting interest rates to avert a recession.

Not only that, the dollar is weakening against the Euro as well. The dollar fell last week against the euro by the most since December after Fed Chairman Ben S. Bernanke said some small banks may fail and unemployment will increase.

The dollar weakened to a record low of 1.0323 Swiss francs from 1.0412 and declined to 5.2062 Norwegian kroner compared with 5.2131. Against the Canadian dollar, the U.S. currency dropped to C$0.9856 from C$0.9878. It’s all going against the dollar for the moment. No doubt that is will surely hurt the export dependent economies like India and China significantly.

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