The dollar is up today on the strong hopes of an interest rate cut in the near future.

After last week, the

fed funds futures -- in this case, an indicator of optimism towards a rate cut in the near future -- have been pricing in a very high chance that the

Fed will cut rates before its next meeting. The pivotal news that could solidify a decision by Fed Chairman

Alan Greenspan to cut rates is the consumer confidence data due out tomorrow morning. But until then, the hopes are enough to spawn a dollar rally today.

"It seems that people are crossing their fingers," said Jason Bonanca, currency strategist at

Credit Suisse First Boston

. He added that market derivatives are "pricing in a significant chance of a cut -- although it's always tough to quantify these things."

As for tomorrow's data, Bonanca noted that "the outlook is that it is going to be pretty lousy, no matter how you look at it," and that this could bring the U.S. one step closer to another rate cut. The Fed has already cut rates by a full 100 basis points since the new year. "People are expecting this to be the 'Greenspan saves the day' cut again," said Bonanca.

On the optimism, the dollar is gaining value against the euro today, with the euro recently trading at $0.9092, down from $0.9172 at the close of trading last Friday.

Rumors are also circulating that Japan may also cut its interest rates to alleviate the pressures on its ailing economy, but U.S. optimism seems stronger, as the dollar makes gains on the yen today. While "a minority faction" may be discussing a rate cut or even a return to a zero interest rate policy, according to Bonanca, "the old guard is not convinced." Were a rate cut to come, it would not be for a while yet, he added.

The dollar was most recently trading for 116.47 yen per dollar, up from the last close of 115.85 yen per dollar.

As a mix of the dollar's greater strength against the euro, rather than the yen, and the slight strength given the yen by the hopes of a change in Japanese interest rates, the yen is firming on the euro today. The euro was most recently trading for 105.91 yen per euro, down from 106.21 last week.

The Australian dollar is tracking the euro today, per usual, and is slipping in value against the U.S. dollar. The Aussie buck was most recently at $0.5247, down slightly from $0.5260 at the close of trading Friday.

The British pound is following suit, likely also due to its close proximity to the European single currency. Falling slightly to the dollar, the pound was recently at $1.4463. The pound closed at $1.4533 last week.

The Canadian dollar, always the obstinate one, is bucking the trend and making advances on the U.S. currency today. The dollar was trading most recently for C$1.5343, down just slightly from C$1.5369 at its last close.