Dollar Set for Weekly Gain

The dollar headed for the first weekly advance against the euro and the yen in a month after the Federal Reserve's decision to accept more collateral for loans eased concern about banks' access to capital.

The U.S. currency rose against the pound and the Swiss franc this week after the Fed made an emergency cut to the rate it charges banks to borrow and said it would swap Treasuries for mortgage-backed securities. The Fed also lent $28.8 billion to U.S. securities firms, its first extension of credit to non-banks since the Great Depression.

The dollar traded at $1.5430 per euro as of 7:05 a.m. in New York, set for a 1.4 percent gain in the past five days, the first weekly advance in more than a month. The dollar bought 99.44 yen, little changed from late yesterday and up 0.4 percent this week, the first weekly gain since Feb. 15. The yen rose 1.2 percent this week to 153.53 per euro, touching the strongest since August.

Currency moves may be exaggerated today as trading volume will be less than half of normal due to public holidays in the U.S., the U.K. and other financial markets, said Tsutomu Soma, a bond and currency dealer in Tokyo at Okasan Securities Co.

Dollar Set for Weekly Gain, Bloomberg
3/21/2008 6:44:07 AM