Friday May 30, 2008 - 20:51:10 GMT
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Reuters - www.reuters.com
FOREX NEWS-Dollar down vs euro, but on track for monthly gain
(Adds details, updates prices)
* Dollar headed to second straight monthly gain vs euro
* U.S. personal income rose 0.2 percent in April
* Germany retail sales fell unexpectedly
NEW YORK, May 30 (Reuters) - The dollar fell against the
euro on Friday as some investors sold the U.S. currency after a
string of recent gains had pushed it to its first back-to-back
monthly gains since January 2007.
Demand for the greenback has increased recently as oil
prices eased from record highs and U.S. government data showed
"The dollar had two good months of gains versus the euro,"
said Joe Manimbo, a currency trader at Ruesch International in
Washington. "The greenback is selling off a bit today, but it's
Friday and some investors may want to cash in some gains after
the good run in the currency ahead of the weekend."
In late afternoon trading, the euro was 0.3 percent higher
at $1.5556 <EUR=>, after earlier changing hands as low as
$1.5463. The euro zone common currency was headed for a second
consecutive month of declines against the greenback, according
to Reuters data.
A government report on Friday showed U.S. personal spending
rose in April in line with forecasts and a key measure of
inflation moderated. For details, see [ID:nN29395887]
The dollar also garnered broad support this week from a
further retreat in oil prices from last week's record of
$135.09 per barrel.
"The personal income and spending report fits in nicely
with recent data reflecting a bottom has been put in for the
dollar," said Michael Woolfolk, senior currency strategist at
Bank of New York Mellon. "The focus right now is also on oil
Other data on Friday showed business activity in the U.S.
Midwest contracted in May for the fourth consecutive month, but
the rate of downturn moderated. [ID:nN30365493]
"It is a better-than-expected report," said Ron Simpson,
director of foreign exchange research at Action Economics in
Tampa, Florida. "Overall, this is good news for the dollar. We
have had decent data. Not burning down the barns, but definite
signs of a stabilizing economy."
Against the yen, the dollar was down 0.1 percent on the day
at 105.39 yen <JPY=>, but still within sight of a three-month
high of 105.87 hit on Thursday.
The dollar index .DXY, a basket of six currencies, moved
0.2 percent lower to 72.879, snapping a three-day advance.
EURO ZONE INFLATION EYED
In the euro zone, inflation bounded to a historic peak of
3.6 percent in May, data showed on Friday, while German retail
sales in April fell for the second month in a row.
In an interview published on Friday, European Central Bank
President Jean-Claude Trichet said that the central bank will
do everything it can to preserve price stability and reinforce
expectations of low inflation. [ID:nL3020162]
"The euro is no different to many other currencies -- stuck
between a rock and a hard place with slowing growth and rising
inflation," said Kamal Sharma, a G10 strategist at JP Morgan in
"Inflation is likely to remain above the ECB's target in
the near term. But against the backdrop of slowing growth ...
the ECB is unlikely to pull the trigger on rate hikes through
the rest of the year."
(Additional reporting by Veronica Brown in London; Reporting
by Nick Olivari and Vivianne Rodrigues; editing by Gary
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