Dollar advances on upbeat economic reports

On Thursday June 18, 2009, 5:20 pm EDT
NEW YORK (AP) -- The dollar rose slightly against major currencies Thursday as several upbeat reports on the economy encouraged investors.

A private sector group said its forecast of economic activity rose more than expected in May, marking a second straight gain after seven months of declines.

Meanwhile, the government said the overall number of people drawing unemployment benefits fell last week for the first time since early January.

The 16-nation euro slipped to $1.3903 in late New York trading from $1.3960 Wednesday, while the British pound edged down to $1.6350 from $1.6419 after data showed that retail sales and mortgage lending in Britain dropped in May. The figures dampened hopes that an economic recovery is under way, while government borrowing hit a record high due to the cost of massive stimulus measures.

The dollar advanced to 96.60 Japanese yen from 95.70 yen in New York.

In testimony before the Senate Banking Committee Thursday, Treasury Secretary Timothy Geithner defended Obama's financial regulatory plan to give the Fed more authority, create a new consumer protection agency and bring unregulated sectors of the financial markets under government oversight.

"There's just a lot of underlying concern about how the whole overhaul of the financial system will affect the dollar, and general questions about how strong this economy is going to bounce back," said David Solin, partner at Foreign Exchange Analytics in Essex, Conn. "The dollar will stay within the same ranges as those fears keep away people who would want to do massive dollar buying."

In other late trading, the dollar climbed to 1.0858 Swiss francs from 1.0783 francs late Wednesday, and rose to 1.1330 Canadian dollars from 1.1305.