nation euro fell Thursday against the dollar, dropping below $1.55 before the Easter holidays. The euro bought $1.5425 in afternoon European trading, below the US$1.5613 it bought the night before in New York and nearly a nickel off its all-time high of $1.5904 set Monday. The dollar dropped to 99.23 Japanese yen from 100.00 yen the night before, above its 12-year low of 95.77 set on Tuesday. The British pound drifted lower to $1.9817 from the $1.9849 it bought in New York the night before. James Hughes, a currency analyst at CMC Markets in London, said the dollar's rise was helped by the three-fourths of a percent rate cut by the US Federal Reserve Bank on Tuesday, but said markets are keenly aware that more rate cuts could in fact weaken the dollar and push the euro back upward. “That smaller-than-expected rate cut by the Fed on Tuesday continues to trouble some investors and has helped lend some support to the greenback over the past 36 hours, but consensus remains that further softening of monetary policy will be seen in the US, and this sentiment could well initiate a resumption of selling pressures on the dollar as we approach the weekend break,” he said. The dollar had consistently hit record lows against major currencies in recent weeks, weighed down by mounting worries about the economy as Wall Street turmoil and a broadening credit crisis have threatened the stability of the US financial system. The Fed cut its federal funds rate to 2.25 percent, its sixth interest rate cut since September. Though lower interest rates can spark a nation's economy, they can weigh on its currency as traders transfer funds to countries where they can earn higher returns. The European Central Bank has left its own key rate at 4 percent despite inflation in the euro zone at record highs. __
