Dollar Rises to Highest Since 2006
March 2 (Bloomberg)
The dollar rose to the highest level since April 2006 against the currencies of six major U.S. trading partners as investors sought safety after American International Group Inc. got more U.S. government support.
The euro dropped to a one-week low against the greenback as European Union leaders vetoed Hungary’s proposal for 180 billion euros ($227 billion) of loans to former communist economies in eastern Europe. The Swedish krona fell to a record versus the euro on speculation the Baltic region’s borrowers may default, and the Hungarian forint and Polish zloty tumbled.
“Risk aversion is providing support to the dollar, in particular against the euro,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, the world’s largest foreign-exchange trader.
The dollar increased 0.6 percent to $1.2597 per euro at 10:49 a.m. in New York, from $1.2669 on Feb. 27. It reached $1.2546, the strongest level since Feb. 19. The euro dropped 0.5 percent to 122.97 yen from 123.61. The yen traded at 97.63 per dollar, compared with 97.57.
The Dollar Index, which the ICE uses to track the U.S. currency versus the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, climbed to 88.956, the highest level since April 2006. The index rose 1.8 percent last week, the biggest gain since mid-January, as investors bought the world’s reserve currency on concern the U.S. government may be forced to take over some American banks.
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