The currency climbed against 13 of the 16 most-active currencies after U.S. Treasury Secretary Henry Paulson said ``long-term fundamentals are strong'' and reiterated his stance that he favors a stronger currency. Against the Swiss franc, the dollar traded near a record low as traders retained bets for the Federal Reserve to cut interest rates next week.
The dollar rose to $1.5606 per euro as of 12:13 p.m. in Tokyo, from $1.5635 in New York yesterday, when it fell to $1.5645, the weakest since the European currency's debut in 1999. The dollar traded at 100.59 yen from 100.65 yen yesterday, when it dropped to 99.77 yen, the weakest level since October 1995.
The U.S. currency was little changed at 1.0111 versus the Swiss franc after sliding to a record low of 1.0045 Swiss francs yesterday. It bought $2.0302 per British pound, from $2.0335. The yen traded at 156.95 per euro from 157.35.
The dollar's record-breaking drop may trigger the first coordinated effort to shore up the currency in 13 years, according to strategists at Morgan Stanley and Goldman Sachs Group Inc.
U.S. President George W. Bush said this week in an interview with the U.S. Public Broadcasting Service that the dollar is ``adjusting'' and its decline isn't ``good tidings.'' European Central Bank President Jean-Claude Trichet and Japanese Finance Minister Fukushiro Nukaga have complained about the U.S. currency's slide, because it makes their nations' exports less competitive.
The challenge for officials is fighting the $3.2 trillion- a-day currency market while the Federal Reserve reduces interest rates and the U.S. economy falters. With traders increasing bets on a weaker dollar, the Group of Seven nations may be compelled to act, some strategists said.