| 5.8°C Dublin

Dollar rebounds from six-month euro low

THE dollar bounced back yesterday from a six-month low against the euro as two reports on housing and manufacturing showed modest improvements in the US economy.

In midday trading in New York, the euro fell to $1.3693 from $1.3780 (€1.00684) late on Friday. On Friday, the euro hit a high of $1.3793, its strongest level since mid-March. Last month, the euro shot up 7pc on expectations that the Federal Reserve would commit to more support for the US economy, possibly by buying up large amounts of government securities.

Such a move would likely drive down interest rates: lower rates make the dollar less appealing to investors.

The British pound, meanwhile, edged higher to $1.5852 from $1.5835, while the dollar dipped to 83.31 Japanese yen, compared to 83.37 yen late on Friday. Traders were mostly cautious ahead of several days packed with economic data and central bank decisions.

The Government will release a key report on US jobs on Friday that could heavily influence whether the Fed will step in with more relief for the economy.

Central banks in the 16-nation bloc of European nations, Britain and Japan will also meet to set interest rates and policy. In other trading yesterday, the dollar rose to 1.0228 Canadian dollars from 1.0191 Canadian dollars, but slipped to 0.9721 Swiss francs from 0.9753 Swiss francs.

Earlier in the day, the dollar tumbled to its most recent two-and-a-half-year low at 0.9705 Swiss francs.

Slower growth in the US has muted the dollar's appeal as a safe-haven currency, giving a boost to the Swiss franc and yen instead.

Irish Independent