Sun, Mar 20, 2005 - Page 10 News List

US dollar recovers substantially against euro, yen

AP , NEW YORK

The US dollar climbed for the second day running on Friday, helping the US currency end the week substantially higher versus the euro and the yen.

The dollar lifted overnight as the market began to turn its attention to next week's likely rate hike from the Federal Open Market Committee (FOMC).

However, the greenback showed little reaction to US data in early New York trading and spent the rest of the session drifting down. It was helped lower by a fall in US equity markets and still-high oil prices. In late New York trading, the euro was at US$1.3311 from US$1.3372.

The US dollar was at ?104.67 from ?104.53 and at 1.1644 Swiss francs from SF1.1568. The British pound slipped to US$1.9198 from US$1.9238. Versus the yen, the euro was at ?139.41 from ?139.85.

For the week, the euro was down some 1.1 percent versus the dollar from a week earlier while the dollar was 0.8 percent stronger versus the yen than a week ago. Increased risk aversion thanks to higher US treasury yields has supported the US currency in recent days.

The dollar's climb this week was a surprise for many analysts, who had said that continued market worries about the US current account deficit could push the euro toward its US$1.3668 all-time high.

In fact, said Paul Jackson, senior foreign exchange dealer at CMC Group in New York, the dollar now seems to be treading water, with the single currency shifting between US$1.3250 and US$1.3450 for most of this week.

Jackson said that could remain the case over the next few days, despite the FOMC meeting. The market widely expects the Fed to lift rates by 25 basis points to 2.75 percent.

"I would say we'd remain in a tight range from now on ... I think people already know what to expect," from the FOMC, Jackson said.

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