Dollar recovers against euro

Dollar recovers against euro

	Published : Mon, 30 Apr 2007 21:44 By : Agencies Print this Story

NEW YORK (AP) - The dollar rose Monday as the 13-nation euro backed down from its all-time high against the U.S. currency on mixed economic news from the U.S. and Europe.

In late New York trading, the euro bought $1.3651 -- still high but down from the all-time peak of $1.3682 it hit Friday.

The pound hovered around the $2 mark throughout the day, rising as high as $2.0031 before settling back to $1.9991, still up from $1.9970 late Friday. The dollar dipped slightly against Japan's currency, buying 119.56 yen compared to 119.65 yen.

The Commerce Department reported that spending rose at the slowest rate in five months in March, even though personal incomes posted a solid gain. Also, spending on building projects edged up a slight 0.2 percent in March as strength in hotel and shopping center construction offset the 11th drop in housing activity over the past year.

Consumer spending on all items was up 0.3 percent last month, the slowest increase since a similar rise in October. Incomes rose by 0.7 percent, the fourth straight solid month of income growth.

In Germany, the Federal Statistics Office reported Monday that retail sales fell 0.7 percent for March in Europe's largest economy, underperforming expectations of a 0.8 percent rise.

The preliminary figures were based on results from six of the largest states in the euro area's largest economy.

At the same time, EU statistics agency Eurostat reported in a first estimate that inflation eased slightly from 1.9 percent in March -- well under the European Central Bank's guideline of just under 2 percent. The report added to expectations that the ECB will be in no rush to raise interest rates from the current 3.75 percent when it meets next week.

Higher rates can bolster a currency by providing better returns on certain types of investments.

However, the European Commission's business climate indicator hit a high of 1.61 in April, up from 1.54 in March, with industry managers saying they were more optimistic about total orders, recent production trends and production expectations in the months ahead. Expectations on export orders stayed stable.

Currency traders now shift their gaze to several U.S. economic reports scheduled for release later this week, including the Institute for Supply Management's service sector index due Thursday.

In other trading, the dollar bought 1.2077 Swiss francs, up from 1.2068 late Friday, and 1.1093 Canadian dollars, falling from 1.1156.