Dollar Trades Near Two-Week High


The dollar traded near a two-week high against the euro after Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised.

The greenback also traded near a two-week high versus the yen and the Swiss franc as Paulson said he expects Congress to approve a rescue plan for Fannie Mae and Freddie Mac. The Australian dollar approached an eight-month high against the yen on speculation a government report today will show inflation accelerated in the second quarter.

The dollar traded at $1.5780 per euro at 9:56 a.m. in Tokyo from $1.5783 in New York yesterday, when it touched $1.5758, the strongest level since July 10. The dollar was at 107.32 yen from 107.33 yesterday, when it climbed to 107.45, the highest since July 9. The euro traded at 169.38 yen from 169.43.

The dollar traded at 1.0308 versus the Swiss franc from 1.0311, and was at $1.9912 against the British pound from $1.9917.

The U.S. dollar strengthened yesterday as Paulson said in a speech in New York he's confident that lawmakers will pass a bill to provide funding for Fannie Mae and Freddie Mac, the largest sources of U.S. mortgage financing. He reiterated that a strong dollar is ``really very important.''

The U.S. currency touched a record low of $1.6038 per euro on July 15 as traders speculated that the companies, which own or guarantee almost half of the $12 trillion in outstanding U.S. home loans, may not survive the housing slump.


TradingEconomics.com, Bloomberg
7/22/2008 7:09:04 PM