Currencies

Safe-haven dollar higher on consumer, economy data

NEW YORK -The dollar ticked higher Tuesday as a survey signaled the continued anxiety of U.S. consumers and the government dialed down its reading of third-quarter economic growth.

The euro will not likely be able to push much above $1.50 this week, said Steven Pearson, currency strategist at Bank of America Merrill Lynch. He expects the safe-haven dollar to get a boost from more weak U.S. economic data and from traders' cutting back on risky bets as 2009 winds down.

The euro touched $1.5001 on Monday, its highest point since Nov. 16.

The 16-nation euro slipped to $1.4958 from $1.4973 late Monday in New York. Meanwhile, the British pound dropped to $1.6560 from $1.6621, but the dollar slid to 88.44 Japanese yen from 89.02 yen.

The dollar was also higher against the New Zealand and Australian dollars, which analysts use as barometers of traders' appetite for risky currency bets.

On Tuesday, the Conference Board, a private research group, said its Consumer Confidence Index rose to 49.5 this month from 48.7 in October. That's an improvement, especially from a record low of 25.3 in February, but not by much. It takes a reading above 90 to signal that the economy is on solid footing. A level above 100 implies strong growth.

Moreover, the government said gross domestic product grew at a 2.8 percent pace from July to September, less than its preliminary 3.5 percent estimate last month. Weaker readings on consumer spending and commercial real estate helped tamp down the government's growth estimate, as did a bigger-than-expected drag from the trade deficit.

The lower reading and weak consumer confidence put a damper on stocks Tuesday morning, with the Dow Jones industrials dropping 0.5 percent, and helped push up the dollar.

Investors see safety in the greenback and its access to the Treasury market. Short-term Treasurys are considered one of the world's most liquid and secure investments.

Investors are also keeping an eye out for minutes from the Federal Reserve's interest-rate meeting earlier this month, expected at 2 p.m. ET. The minutes will likely revolve around an exit strategy to monetary stimulus measures before the threat of inflation rises, said Mizuho Securities analyst Patrick Phalon. At the Fed's Nov. 3-4 meeting, it said the key interest rate would likely stay at "exceptionally low levels" for an "extended period."

The current record-low interest rate at a range near zero has weighed down the dollar as investors transfer funds to where they can earn better returns.

In other trading Tuesday morning, the greenback edged up to 1.0098 Swiss francs from 1.0093 francs late Monday, and rose to 1.0595 Canadian dollars from 1.0553.