Monday May 12, 09:22 PM
Dollar falls vs euro, pound; gains on yen
NEW YORK (AP) - The dollar weakened further against the euro Monday as markets waited for statements from Federal Reserve Chairman Ben Bernanke and economic data expected Tuesday.
The 15-nation euro rose to $1.5540 from $1.5480
late Friday.
The dollar also edged lower against the British pound, which rose to $1.9566 from $1.9519, but gained to 104.17 Japanese yen from 103.09 yen.
The dollar is still up about 3 percent since hitting an all-time low of $1.6018 against the euro on April 22, holding some gains on the belief that the Fed may have finished cutting interest rates for the near term and that the U.S. economy may avoid a severe recession.
Investors were looking ahead to Bernanke's speech Tuesday for further indications about the Fed's intentions on interest rates.
The Fed has lowered rates seven times in as many months to 2 percent. Meanwhile, the European Central Bank has kept the euro-zone's interest rate at 4 percent as it struggles to fight rising inflation.
Lower interest rates can spur a country's economy, but may weigh on its currency as investors transfer their funds to higher-yielding assets. Keeping interest rates high is often used as a tool to fight inflation.
Traders waited to see whether Bernanke's remarks Tuesday would support the impression that the Fed's rate cut on April 30 was the last of the series.
There is also a focus on the U.S. retail sector for indications about the strength of the American economy. Retail sales figures come out Tuesday, with the consumer price index numbers scheduled for Wednesday -- all amid a raft of earnings reports from major U.S. retailers, including Wal-Mart Stores Inc.
Gavin Friend, the head of foreign exchange strategy at Commerzbank (Xetra: 803200 - news) in London, said that from a fundamental perspective, the dollar will most likely weaken again if the numbers are poor.
In other New York trading, the dollar rose to 1.0444 Swiss francs from 1.0410 francs, but slumped to 1.0050 Canadian dollars from 1.0067.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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