The dollar fell about 1.5 cents to $1.5145 versus the euro before gaining back some ground to $1.5125 Wednesday at mid-day, after a series of data points suggested the U.S. economy continues to slow, which will invariably prompt the U.S. Federal Reserve to lower interest rates further to stimulate growth.

The dollar also declined about one-cent to $1.9907 versus the British pound, and fell about 1 yen to 106.35 yen versus Japan's yen.

Independent currency trader Andrew Resnick, formerly of Next Capital of New York, told BloggingStocks Wednesday the factors that have led to a three-year decline in the dollar have accelerated in the past week.

"We have an oil price above $100 per barrel with investors piling into it as an inflation hedge. That hurts the dollar two ways. It takes money out of U.S. assets and by boosting oil's price, it increases the trade deficit, which is bearish for the dollar," Resnick said. "Also, the January durable goods order report was bearish, which means the Fed [U.S. Federal Reserve] will cut rates once, maybe twice more, which will lead investors to choose higher-interest-rate currencies."

Western Union used to transmit telegrams like: Dear George, my office authorized a transfer of up to fifty thousand dollars to the Bailey Building & Loan STOP Then the advent of the telephone substantially reduced telegram traffic STOP

Next came the Internet and e-mail, which not only reduced telegram traffic to a crawl, it also decreased hard-copy letter writing, as the U.S. Postal Service will confirm.

Since that time The Western Union Company (NYSE: WU) has focused on its consumer money transfer service, or moneygrams, and the results have been impressive. Analysts expect 11-14% revenue growth in FY 2008 on higher transaction fees and foreign exchange fees.

"We will further improve monetary policy controls, continue to use quantitative measures, widen usage of price-related policy tools and increase innovation in monetary policy measures,'' the central bank said in the report, without elaborating, Bloomberg News reported.

Zhou Xiaochuan, head of the People's Bank of China, China's central bank, has said repeatedly in recent months that the yuan rate would gradually reach a "balanced" level and help bring equilibrium to the balance of payments.

At issue: The yuan

China is facing pressure on a number of fronts to appreciate its currency. Both the United States and Europe would like China, which maintains the yuan's rate in an artificially low trading band, to float its currency or at least let it come close to reflecting a fair-value rate in the years ahead. China keeps the yuan artificially low to reduce the cost of goods exported, which boosts exports sales. Both the U.S. and Europe say that rate gives China an unnatural competitive advantage in trade. China counters that it needs a low-valued yuan to increase wealth and protect young sectors of its developing economy.

On Wednesday, the dollar was higher against the world's major currencies, improving 0.21 cents to $1.4684 versus the euro, 0.50 yen to 108.39 versus Japan's yen, and improving 1.35 cents to $1.9596 versus the British pound.

Andrew Resnick, independent currency trader, told BloggingStocks Wednesday that Jen's thesis is plausible.