Dollar Falls Sharply on Profit-Taking

The dollar, hurt by profit-taking and undermined by lower U.S. interest rates, fell sharply against most foreign currencies on Tuesday.

The downturn ended a four-day rally by the U.S. currency.

Gold prices rose. Republic National Bank in New York said gold was quoted at $314.50 an ounce at 4 p.m. EDT, up $5.50 from the late bid Monday.

“The dollar posted sharp declines against all major foreign currencies apparently because of profit-taking from its recent runup,” said Gary Dorsch, a currency analyst with Oppenheimer Rouse Futures in Chicago.

The dollar had risen against most currencies since last Wednesday.

Dorsch added: “I think a reason for the decline was expectations for lower interest rates in the United States. And the federal funds rate today was probably the focus of most of the attention.”