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Dollar, Near 2-Year High, Continues Rally

*Old USD-thread: #msg-6935495

Dollar, Near 2-Year High, Continues Rally
Wednesday November 9, 7:24 am ET
Dollar, Near Two-Year High, Continues to Rally Against Euro

FRANKFURT, Germany (AP) -- The dollar continued to rise against the euro Wednesday as concerns about unrest in France and the lack of a new government in Germany kept the European common currency near two-year lows against the dollar.

In midday European trading, the 12-nation euro bought $1.1738, down from $1.1787 the night before in New York and its lowest levels since November 2003. The euro fell as low as $1.1711 on Tuesday before rebounding slightly.

The dollar has been buoyed recently by signs of economic strength as well as continuing increases in the U.S. Federal Reserve's benchmark interest rate. Policy-makers raised the rate last week by a quarter percentage point to 4 percent -- the highest rate in more than four years -- in the 12th such increase since June 2004, and indicated they would continue to do so at a measured pace.

The European Central Bank left its rate unchanged at 2 percent, where it has been for almost 2 1/2 years.

Higher rates boost the U.S. currency by making dollar-denominated securities relatively more attractive to investors. Growing foreign investment in the U.S. bond market has pushed the dollar higher and the euro lower.

The British pound fell to $1.7376 from $1.7434 and the dollar was also higher against the Japanese currency, rising to 117.54 yen from 117.12 the night before.

The violence in France continued for a 13th straight day overnight, as rioters shrugged off emergency laws that took effect Wednesday, looting and burning two superstores, setting fire to a newspaper office and paralyzing Lyon's subway system with a firebomb.


LINK: http://biz.yahoo.com/ap/051109/dollar.html?.v=2