Dollar Rises Versus Euro, Yen


The dollar rose against the euro and the yen as a South Korean bank said it's ``considering'' an investment in Lehman Brothers Holdings Inc., indicating U.S. financial firms may weather credit market turmoil.

The U.S. currency also rose versus the euro on speculation yesterday's biggest drop since June was overdone and as a decline in European industrial orders added to evidence of a deepening economic slowdown. Federal Reserve Chairman Ben S. Bernanke said falling commodity prices, a stable dollar and slowing growth should stem inflation.

The U.S. currency climbed 0.6 percent to $1.4803 per euro at 11:09 a.m. in New York, from $1.4899 yesterday, when it fell 1 percent. The dollar rose 1.4 percent to 109.96 yen, from 108.43. It touched 108.14 yesterday, the lowest since Aug. 5. The yen fell 0.7 percent to 162.74 per euro, from 161.57.

The U.S. currency has decreased 0.8 percent against the euro this week, the first drop in six weeks, on concern deepening credit-market losses and a surge in crude oil prices will prolong the U.S. economic slowdown. The dollar has dropped 0.5 percent versus Japan's currency, while the euro has increased 0.3 percent against the yen.

The ICE futures exchange's Dollar Index, which tracks the greenback against the currencies of six U.S. trading partners, rose 0.5 percent today to 76.601. It fell 1 percent yesterday, the biggest drop in almost five months.

The dollar has gained almost 8 percent versus the euro since touching the all-time low of $1.6038 on July 15 and appreciated 2 percent against the yen this month as the European and Japanese economies shrank in the second quarter and crude oil fell 19 percent from a record of $147.27 a barrel reached July 11.

The euro weakened as the European Union statistics office said today that industrial orders in the 15 countries that use the currency fell 7.4 percent from a year earlier, the most since December 2001. The German economy, Europe's largest, shrank 0.5 percent in the second quarter, the first contraction in four years.


TradingEconomics.com, Bloomberg
8/22/2008 8:22:02 AM