Dollar Falls

The dollar snapped two days of gains against the euro after President George W. Bush said the U.S. may face a ``painful'' recession and as traders bet on a Federal Reserve interest-rate cut next month.

The dollar also weakened versus the Swiss franc before a U.S. government report today that may show home sales dropped in August, extending the worst housing slump in 17 years.

The dollar fell to $1.4688 per euro as of 8:14 a.m. in New York, from $1.4621 yesterday. The euro was at 155.72 yen from 155.15. The U.S. currency dropped to $1.8558 against the pound from $1.8465, and to 1.0855 versus the franc from 1.0916.

The dollar has fallen 4.6 percent against the euro since touching a one-year high of $1.3882 on Sept. 11. The dollar reached $1.6038 on July 15, the weakest level since the European currency made its debut in 1999.

The British pound rose against against 15 of the 16 most-traded currencies after policy maker Andrew Sentance said the Bank of England must temper its response to the credit crisis and stick to its inflation focus.

The yuan climbed, after sliding the most in three weeks yesterday, on speculation the credit-market crisis will push the U.S. into a recession and weaken the dollar. The yuan rose 0.1 percent to 6.8170 per dollar at 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System.

ndia's rupee weakened for a third day on speculation importers increased dollar purchases to settle month-end crude oil bills. The rupee slid 0.5 percent to 46.205 a dollar at the 5 p.m. close in Mumbai.

Russia's ruble snapped two days of gains against the central bank's dollar-euro basket after a report showed the nation's international reserves declined for a third straight week to the lowest in almost three months. The currency was as strong as 24.8675 per dollar, a three-week high, before trading at 24.9760, from 25.0345 yesterday.,
9/25/2008 5:27:42 AM