We knew it couldn't last

After a three-day correction, the dollar is once again losing value to major currencies across the board.

After pulling recent gains off of, most significantly, the euro this week, directions have again reversed as "the trends we've seen over the past two weeks are still intact," said senior vice president John McCarthy at

ING Barings Capital Markets

. There is strong upward movement in the euro, the euro/yen, and the dollar yen today, and he says he's "a little surprised" at how big the gains are already this morning.

The worries about the increasing disparity in growth rates between the U.S. and Europe, and grim sentiment about the Japanese economy are back in the limelight today as currency trading returns to the general trend of the past several weeks.

"It is really a yen story that has brought about the latest leg in the upward move

of the euro," McCarthy said. The market focus on the ailing Japanese economy, further aggravated by the

Nikkei

reaching its lowest levels in two years yesterday, has pushed up the euro/yen cross, which in turn, is pulling the euro/dollar cross up with it.

McCarthy noted that Japanese officials, as well as worldwide interests, are looking to allow the further depression of the yen. "The only possible way to see the Japanese economy grow is through a weaker yen, so that

the Japanese can export their way out of trouble," McCarthy said.

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The yen hit new 17-month lows versus the dollar earlier, for the second consecutive day. The dollar/yen cross was recently trading at 117.42, up from yesterday's close of 116.49.

The yen also hit new 10-month lows against the euro this morning. The euro recently traded at 111.81, up from a close yesterday of 109.11.

While the euro/dollar cross is climbing on the back of the euro/yen, McCarthy opined that "the impact on Europe

of the U.S. economic slowdown is still to be felt," adding that, "we need more data before we see parity or beyond."

The euro was recently trading at $0.9522, up strongly from yesterday's close of $0.9364.

The

Bank of England

announced today that it would leave England's key interest rate unchanged at 6%, as expected, despite the recent surprise maneuver of the U.S.

Fed to lower interest rates. The British pound has made gains on the dollar since this announcement, recently trading at $1.50, up over a penny from $1.4873 at yesterday's close.

The Australian dollar is firming slightly against the U.S. currency, most recently at $0.5585, up from $0.5558 at market close yesterday. The Canadian dollar is following suit. The U.S. dollar was recently trading for C$1.4966, down from its last close of C$1.5015.

And the Zimbabwe dollar is little changed in early New York trading against the U.S. currency today, despite mounting pressure on the Zimbabwean government to devalue its currency to stimulate hard currency inflow into the African country. You're glad you know that now.

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