Dollar Rebounds From Week's Low

The dollar rebounded from the lowest level against the euro this week as the U.S. economy expanded in the second quarter faster than previously estimated and crude oil prices decreased.

Against the euro, the dollar advanced 0.2 percent to $1.4702 at 3:04 p.m. in New York, from $1.4727 yesterday. It earlier touched $1.4811, the weakest since Aug. 22. The euro depreciated 0.1 percent to 161.09 yen, from 161.27. The dollar was little changed at 109.56 yen, compared with 109.49.

The dollar has increased against all of the other major currencies in August on speculation the economies of countries outside the U.S. are slowing. The greenback has risen 6.2 percent versus the euro, the biggest monthly gain since the European currency began trading in 1999.

The euro rose against the dollar yesterday the most in almost a week as European Central Bank council member Axel Weber said in an interview in Frankfurt that policy makers may need to raise borrowing costs once the economic outlook ``brightens'' toward the end of the year. Annual inflation of 4 percent in the 15 nations using the euro is twice the ECB's target of just below 2 percent.

The U.S. currency has gained 8 percent from a record low of $1.6038 per euro set on July 15 as the European economy shrank in the second quarter and crude oil declined 20 percent from its all-time high reached last month.

Dollar Rebounds From Week, Bloomberg
8/28/2008 12:23:29 PM