Investors sell dollars after reports reflect grim mood of consumers, cautious businesses

Dollar sinks after consumer confidence wanes

NEW YORK — The dollar fell against other currencies Tuesday after a handful of reports underscored worries about the weakening U.S. economy.

The two surveys, on consumer confidence and the outlook of CEOs at major U.S. companies, suggested that U.S. shoppers are increasingly downbeat about the economy while top business executives remain cautious and were increasingly likely to cut back on hiring plans.

In late afternoon trading in New York, the euro rose to $1.3567 from $1.3475 late Monday, hitting its most recent five-month high at $1.3595 earlier in the day. The euro has risen nearly 7 percent this month against the dollar because investors expect the Federal Reserve will take more action to support the U.S. economy. That would likely bring down interest rates and make the U.S. currency less appealing to investors.

The dollar has declined against the euro during the past several months despite ongoing worries about the debt levels of European governments and banks.

In other trading Tuesday, the British pound dropped to $1.5793 from $1.5855, while the dollar tumbled to 83.93 Japanese yen from 84.24 yen. It’s the dollar’s first drop below 84 yen since the Bank of Japan intervened in foreign exchange markets to weaken the yen on Sept. 16.

The yen had jumped to 15-year highs against the U.S. dollar earlier this month because of its appeal as a safe-haven currency. A stronger yen hurts profits of Japan’s major exporters, threatening to undermine the country’s recovery from the recession.

The dollar also fell against currencies of countries that are big commodity exporters, such as the Australian dollar. The Australian currency traded at its highest level versus the dollar since July 2008.

Driving the U.S. currency lower Tuesday was a Conference Board report saying its monthly index of consumer confidence fell to 48.5 in September from 53.2 in August. A September survey from Business Roundtable, an association of corporate chief executives, suggested that CEOs were less optimistic about sales growth and hiring plans than they had been in June.

Also on Tuesday, the dollar rose to 1.0311 Canadian dollars from 1.0259 Canadian dollars. It dropped to 0.9767 Swiss francs from 0.9845 Swiss francs, hitting its most recent 2 1/2 year low against the Swiss currency at 0.9740 Swiss francs.