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Dollar Falls Against Key Currencies
(AP Online Via Thomson Dialog NewsEdge) NEW YORK_The dollar fell against the euro and most other key currencies Friday, a day after the Federal Reserve left interest rates unchanged.
In late New York trading, the 13-nation euro rose to $1.3535 from $1.3432 late Thursday. The British pound continued to trade above the $2 mark, rising to $2.0077 from $2.0018, while the dollar dipped to 123.14 Japanese yen from 123.18.
The dollar weakened as the second quarter wound to a close and traders secured positions heading into a holiday week in the U.S.
Positive economic news from Washington failed to boost the dollar following the Fed's decision Thursday to keep interest rates unchanged at 5.25 percent.
The U.S. central bank said it was optimistic about economic growth, but its main concern remains that inflation will fail to moderate.
Higher interest rates, a weapon against inflation, can bolster a currency by giving better returns on certain kinds of investments.
The U.S. Commerce Department reported Friday that, for the second month in a row, consumer spending was up by 0.5 percent.
Incomes, the fuel for future spending, rebounded in May, growing by 0.4 percent. That was an improvement from the 0.2 percent drop reported for April.
In other economic news, construction spending rose 0.9 percent in May, the biggest gain in nearly 1 1/2 years, the government said in a second report.
Also Friday, the dollar bought 1.2219 Swiss francs, down from 1.2326 late Thursday, and 1.0626 Canadian dollars, up from 1.0603.
Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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