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Dollar hits two-week high against euro |
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Greenback raised the most against the euro Tuesday in more than two weeks as US Treasury Secretary Henry Paulson voiced support for the currency and the Federal Reserve Bank of Philadelphia president said interest rates should be raised.
The greenback extended its gain after breaking through $1.59, where orders to sell the euro were clustered, and increased further as crude oil prices fell.
Mexico's peso touched a five-year high as economists predicted central bank policy makers will raise borrowing costs next month to curb the highest inflation in more than three years.
The dollar increased 0.9% to $1.5779 per euro in New York, from $1.5922 yesterday. It touched $1.5758, the strongest since July 10. The dollar advanced 0.7% to 107.20 yen, from 106.45, and reached 107.45, the highest since July 9. The yen rose 0.1% to 169.26 per euro, from 169.48. It fell to a record of 169.91 yesterday.
The Mexican peso increased as much as 0.7% to 10.0568 versus the dollar, the strongest since October 2002.
The dollar touched the record low earlier this month on concern the companies, which own or guarantee almost half of the $12 trillion in US home loans outstanding, may fail to survive the housing slump.
Philadelphia Fed President Charles Plosser said in a speech that the US central bank should raise interest rates sooner rather than later. He argued against reductions in two Fed decisions this year.
The two-year Treasury note's yield rose 12 basis points, or 0.12 percentage point, to 2.72%. The rate was 187 basis points lower than that of the comparable-maturity German bund, narrowing from 203 basis points yesterday.
The Canadian dollar fell 0.9% to $C1.0085 per US dollar, the biggest decline this month, as crude oil prices dropped. Commodities such as oil and gold make up half of the country's exports. The currency started weakening on a report that showed retail sales rose in May less than forecast.
The Czech koruna fell 2.4% against the euro, the most since October 1999, after Governor Zdenek Tuma of the central bank said policy makers may reduce interest rates as soon as next month because the koruna's advance threatens to ''damage'' the economy.
The koruna fell to 23.485 per euro, from a record high of 22.877 set yesterday. It has gained 13% against the euro this year for the best performance among currencies of developing countries.
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| FOREX Reports |
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Aussie ends lower again |
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The Aussie closed trading weaker Wednesday as another lackluster day on Wall Street weighed on risk sentiment.
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Yen keeps rising |
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Japanese yen continued gains Wednesday as investors turned risk-averse after shares in Asia fell on fears that the credit crunch would lead to a sharp slowdown in the global economy.
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Pound sterling recovers against dollar |
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Pound sterling continued its recovery Tuesday as traders welcomed the UK government's plan to inject 37 billion pounds into the country's ailing banks.
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