The dollar fell to a 16-month low against the euro Thursday with investors expecting the Federal Reserve to keep interest rates near zero, even as U.S. companies post better-than-expected financial performances this quarter.
Higher rates tend to support a currency's value because they can generate a bigger return on investments denominated in that currency _ lower rates make a currency less appealing. The Fed has kept its key rate near zero since December 2008, while most of the world's other central banks are raising interest rates.
The Fed next meets to talk about interest rates and other monetary policy on Tuesday and Wednesday. The central bank is not expected to cut short the $600 billion bond-purchasing program, set to expire in June, that was designed to drive down interest rates.
The euro was worth $1.4544 late Thursday, up from $1.4514 late Wednesday. The euro earlier rose as high as $1.4648, its strongest level since December 2009.
The British pound rose to $1.6517 from $1.6407, while the dollar fell to 81.90 Japanese yen from 82.37 yen.
Positive earnings reports from major U.S. companies such as Apple Inc. and General Electric Co. and a drop in the number of people filing for jobless aid turned investors away from the low-yielding dollar. Currencies of countries that are major exporters of raw materials such as oil, iron ore and grains jumped as commodity prices rose _ the price of benchmark West Texas Intermediate crude traded near $112 a barrel on the Nymex.
The Australian dollar hit a record $1.0774 Thursday, its highest point since it began trading freely in December 1983, while the U.S. dollar fell as low as 94.52 Canadian cents, its weakest level against its neighbor currency since November 2007.
In other trading Thursday, the dollar fell to 0.8854 Swiss franc from 0.8890 Swiss franc.