The euro rose against the US dollar for the first time in three weeks, after the European Central Bank said it would lend US dollars to euro-area banks, tempering liquidity concern amid the region’s sovereign debt crisis.
The 17-nation currency pared its five-day gain on Friday as finance ministers from euro-zone nations meeting in Poland failed to inspire confidence in measures to control debt problems. Canada’s dollar rose against all of its most-traded counterparts on speculation the nation’s fiscal condition will attract investors during market turmoil.
The Dollar Index fell before a US Federal Reserve meeting next week, where officials may announce further economic stimulus.
“The swap agreement between the ECB and other central banks helped to alleviate some concerns about funding at European banks, that’s been a positive,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc, a currency brokerage.
The euro strengthened 1 percent to US$1.3796, from US$1.3656 on Sept. 9. It reached a seven-month low of US$1.3495 on Monday. The shared currency was little changed at ¥105.9. The dollar dropped 1 percent to US$0.768 per yen, from US$0.776.
The Dollar Index, which measures the greenback against the currencies of six major US trading partners, weakened 0.8 percent to 76.547, from 77.192 last week.
The franc was little changed this week against the euro at SF1.2086. It rose 0.9 percent to SF0.875 per US dollar.
The British pound fell for a fourth week against the US dollar on speculation a deteriorating economic outlook will spur the Bank of England to introduce additional monetary stimulus. The pound dropped 0.6 percent to US$1.5791, from US$1.5883 last week.
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