Dollar Rises Friday Amid Further Interest Rate Speculation, Friday, June 08, 2007 4:33:08 PM

The dollar gained against the other major currencies during Friday trading in New York. The greenback touched two-month highs against the euro and sterling in morning dealings and remained up into the afternoon. Trading took place as the Department of Commerce released its report on U.S. international trade, showing that the trade deficit narrowed in April by much more than economists had been expecting. Lingering concerns about interest rates contributed to the dollar`s advance, as a high-ranking Federal Reserve official echoed hawkish comments made earlier in the week by chairman Ben Bernanke.

The dollar advanced on the euro on Friday and touched a two-month high. The greenback posted strong gains in the morning, touching as high as 1.3322 at 6:15 a.m. ET. It slipped slightly off of that, but was at 1.3367 at 3:45 p.m. ET. Early trading took place amid the release of data that showed Germany`s trade surplus in April declined to 15 billion euros. Also, France trade deficit widened to EUR2.83 billion in April.

The dollar also climbed to a two-month high against the British pound on Friday in New York. The greenback rallied in the morning, and got as high as 1.9623 at 6:15 a.m. ET before leveling off. It slipped a little after that, but settled into a range near the high. The buck was at 1.9677 at 3:45 p.m. ET. Trading took place amid the release of data that showed UK industrial production expanded 0.3% from the prior month in April. This according to a report from the Office of the National Statistics. The result compared to revised 0.2% increase in the prior month. Initially, the March growth was reported as 0.3%. Economists were looking for 0.2% growth in April.

The dollar stabilized near a daily high against the yen on Friday in New York. The dollar gained sharply in early morning hours, settling into a range at around 6 a.m. It edged up to as high as 121.83 at 9:30 a.m. before stabilizing. The greenback remained near that mark at around 3:45 p.m. Traders considered data showing that the Japanese Economy Watchers Current Index fell in May. Also on Friday, Japan`s Nikkei index saw a 1.5% decline, its biggest single-day drop in almost two months.

A report from the U.S. government showed that the trade deficit narrowed to $58.5 billion in April from a revised $62.4 billion in March. Economists had expected the deficit to narrow to $63.5 billion from the $63.9 billion originally reported for the previous month. In addition, Michael Moskow, president of the Federal Reserve Bank of Chicago, said that inflation remains the predominant risk to the economy. This followed similar comments made by Fed Chairman Ben Bernanke earlier in the week.

Copyright © 2007 RTTNews.com. All Rights Reserved.