The dollar hit a two-week low against the euro today after a regional Federal Reserve survey pointed to a slowdown in the US economy.
The Philadelphia Fed's business activity survey for September posted its first negative reading in over three years, indicating a significant decline in manufacturing in the mid-Atlantic region.
Expectations that US interest rates may have no further to rise from the current 5.25 per cent contrast with investor views that the European Central Bank will raise interest rates a few more times from the current 3 per cent by mid-2007.
The Fed left rates unchanged earlier this week for a second time in a row, after 17 straight increases. Earlier, the euro was trading at $1.2816, up a third of a per cent on the day but off an earlier two-week high of $1.2832.
The dollar was slightly lower at 116.24 yen, eyeing the previous day's two-week low. The euro was up 0.3 per cent at 149.11 yen.
