U.S. dollar gains slightly against euro
BERLIN (AP) – The U.S. dollar edged up Tuesday against the euro, which finished below the $1.28 level for the second straight day, and briefly reached a two-month high against the Japanese yen. The 12-nation European currency was quoted at $1.2775 in late New York trading, down slightly from $1.2780 late Monday in New York but above a low of $1.2733 earlier in Tuesday’s session.
The dollar also rose to a two-month high of 105.95 yen before settling at 105.66 yen, up from 104.84 yen late Monday.
The dollar was mixed against other rivals, with the British pound trading lower at $1.8556 late in New York from $1.8587 Monday. But the U.S. currency fell to 1.2209 Swiss francs from 1.2211 and to 1.2477 Canadian dollars from 1.2556.
The euro dipped under $1.28 on Monday for the first time since Nov. 5 after President Bush sent Congress a $2.57 trillion budget that he described as lean for 2006.
The euro rose from around $1.20 in September to an all-time high of $1.3667 at the end of December on nagging concerns over the U.S. trade and budget deficits.
Though professing a “strong dollar” policy, many analysts believe the Bush administration has been letting the dollar weaken because it helps U.S. exports, making products cheaper overseas.
The opposite effect has occurred in Europe, and leaders have begun to worry that the strength of the euro will hurt the zone’s largely export-driven economy by making products more expensive in the United States, or cutting into manufacturers’ profit margins.
Problems have begun to show, with automaker DaimlerChrysler AG announcing Monday it would delay the U.S. launch of its new Mercedes-Benz B-Class sport wagon over concerns that the weak dollar would eat too deeply into profits.
AP-ES-02-08-05 1603EST