U.S. Dollar Trades Near 8-Month Low on Fed Bets

The U.S. dollar traded near an eight-month low against the euro on bets that the Federal Reserve will signal it is willing to buy more government debt in order to stimulate the economy.

The U.S. dollar traded at $1.3940 per euro as of 11:08 a.m. in London, Bloomberg News reported. It fell to $1.4012 earlier today and reached $1.4029 on Oct. 7, the weakest since Jan. 28.

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Weak employment figures for September indicate that the U.S. economic recovery may be faltering. On Oct. 4, Fed Chairman Ben Bernanke said that more large-scale asset purchases, sometimes called quantitative easing, would likely aid the economy.

William Dudley, president of the New York Fed, is due to speak later today. Dudley has voiced support for more bond purchases.

"Since August, the Fed has been leaning towards more quantitative easing measures to underpin the weakened U.S. recovery," Philip Wee, a senior currency economist at DBS Group Holdings Ltd., wrote in a research note today. "We have downgraded the outlook for the dollar."