Dollar rises as economic fears ease

Dollar rises as economic fears ease

	Published : Fri, 30 Nov 2007 23:32 By : Agencies Print this Story

NEW YORK (AP) - The dollar rose against the euro, bucking data that hinted at an economic slowdown, and closing out a week during which Wall Street rose.

The 13-nation euro currency was worth $1.4636 in the late afternoon, down from $1.4753 Thursday. The dollar also climbed against the pound, as the British currency traded at $2.0569 Friday, off from $2.0613.

The Swiss franc and the yen, both popularly used in 'carry trades,' fell against the dollar as investors' taste for risk returned.

Carry trades involve borrowing currencies from countries with low interest rates, such as Japan and Switzerland, and investing the funds in higher-yielding assets elsewhere.

Late Thursday, Federal Reserve Chairman Ben Bernanke made a speech that bolstered investors' expectations for future rate cuts, providing a mild boost to stocks Friday after the upsurge earlier this week.

Lower interest rates can jump-start an economy, but they can also weaken a currency as investors transfer funds to countries where they can earn higher returns.

Investors seemed to be disregarding the prospect of future rate cuts dragging on the dollar as stocks rose.

'Markets are feeling a bit more comfortable, at least in the near term,' said Bob Sinche, head of global foreign exchange strategy at Bank of America Corp. 'People are looking at eurodollar unable to push up toward that $1.50 level ... and there's now more talk that the dollar is structurally undervalued.'

Investors seemed to ignore the U.S. Commerce Department's spending report, which showed that in October, the pace of consumer buying slowed and growth in personal incomes rose by a six-month low of 0.2 percent.

Meanwhile, construction spending in October fell by 0.8 percent, with spending on house-building falling for the 20th consecutive month.

The dollar rose to 1.1311 Swiss francs late Friday from 1.1171 Swiss francs, and surged against the yen to 111.15 Japanese yen from 109.84 yen.

The dollar edged up against the Canadian dollar, buying 99.87 Canadian cents from 99.67 Canadian cents. Earlier Friday, the Canadian currency had dropped below parity with the U.S. dollar to 1.0015 Canadian dollars for every American dollar.