US dollar continues to drop against euro

The US dollar weakened against most major currencies Wednesday and it fell against the euro for the seventh consecutive day on higher money market rates in the euro zone. Eurozone overnight lending rates have been rising in the last few days, as banks have paid back funding lent by the European Central Bank following the European debt crisis. Moreover, the ECB refrained from further monetary stimulus last week, which also supported the euro. Chief budget negotiators in the U.S. Congress said late Tuesday that they had reached a two-year deal to avoid a government shutdown on Jan. 15. The budget deal still needs to be approved by both chambers of Congress. However, the budget deal was still unable to lift the U.S. dollar. The dollar index, which tracks the greenback versus the six major currencies, fell 0.1 percent to 79.85. The greenback has been weak in the last few sessions as many analysts still believe the Federal Reserve need to see more evidence of economic improvements and it would probably start to taper bond purchases in March 2014. The next Fed's policy meeting will be held on Dec. 17-18. In late New York trading, the euro rose to 1.3788 U.S. dollars from 1.3763 dollars in the previous session, and the British pound decreased to 1.6382 U.S. dollars from 1.6446 dollars. The Australian dollar slipped to 0.9067 U.S. dollar from 0.9156 dollar. The U.S. dollar bought 102.56 Japanese yen, lower than 102.77 yen of the previous session. The U.S. dollar moved down to 0.8805 Swiss franc from 0.8872 Swiss franc and went down to 1.0594 Canadian dollars from 1.0610 Canadian dollars Tuesday.