NEW YORK (AFP) — The dollar took a fresh beating Wednesday after the International Monetary Fund forecast that the US economy would fall into a "mild recession," increasing the chance of more interest rate cuts.
The euro was trading at 1.5827 dollars at 2100 GMT after 1.5711 late Tuesday in New York.
The dollar was meanwhile trading at 101.81 yen, down from 102.53 on Tuesday.
The International Monetary Fund in its twice-yearly survey of the global economy predicted that the world's largest economy would see growth in 2008 of just 0.5 percent and said a "mild" recession appears inevitable.
For 2009, improvement will be scant, with growth averaging a meager 0.6 percent.
"Concerns about the depth of the possible 'recession' may have on first-quarter earnings and a surge in energy prices weighed on the dollar," said Bob Kozak at Alaron Trading.
The IMF report added that the US Federal Reserve, which has already slashed its base interest rate by three full points to 2.25 percent, "may well need to continue easing interest rates for some time, depending on the emerging evidence on the extent of the downturn."
The IMF study put renewed pressure on the dollar, which had already been struggling since the publication late Tuesday of the minutes from the Fed's March policy-setting meeting.
"The March minutes were suitably dovish given the decision at the meeting to cut rates by 75 basis points," said Stuart Bennett at Calyon.
They showed that Fed policymakers were still worried about growth, even though inflation may slow the pace of future rate cuts.
The euro was meanwhile supported by expectations the European Central Bank would leave eurozone rates unchanged on Thursday.
The ECB's benchmark interest rate currently stands at 4.00 percent, sharply higher than that of the Fed and tending therefore to make the euro more attractive to investors than the dollar.
The euro hit an all-time high against the British pound as the market bet that the Bank of England would cut interest rates on Thursday while the ECB sits tight, traders said.
In late New York trade, the dollar stood at 1.0017 Swiss francs from 1.0141 Tuesday.
The pound was at 1.9757 dollars from 1.9686.
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