Euro higher to $1.4913 in European morning trade

posted: 5 DAYS 15 HOURS AGO

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FRANKFURT -The euro rose against the dollar Friday after reports out of the U.S. on employment and housing raised further fears that the economy would continue to be weak into 2010.

The 16-nation euro rose to $1.4913 in European morning trade, up from the $1.4865 late Thursday in New York.

The British pound was higher at $1.6642 compared with $1.6617, while the dollar rose slightly to 88.80 Japanese yen from 88.74 late Thursday in New York.

On Thursday, the dollar had gained some ground as the government said jobless claims for the newly unemployed remained elevated. Another report showed more homeowners sinking into foreclosure. The Conference Board, a private research group, said its forecast of economic activity grew — but analysts said momentum was dropping and the U.S. would have slow, bumpy growth next year.

Weaker economic news can support the dollar as investors move investments into its safety as a steady currency. But weaker economic news can also weigh against the dollar as investors seek out better returns. Higher interest rates in Europe and some economic improvements there have contributed to the euro's gains in recent weeks.

Still, U.S. economic activity is picking up, according to The Philadelphia Fed's General Activity Index, Wells Fargo analysts said. That should help the dollar.

The November "general activity index rose 5.2 points to 16.7, higher than consensus expectations," Wells Fargo said in a Thursday research note.

"The future general activity index moved lower to 36.8, but the underlying trend (12-month moving average) continued to increase, likely indicating that manufacturers are still optimistic about future business conditions."

2009-11-20 03:26:33