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Dollar hits nine month low against euro

Friday, September 11, 2009 LONDON: The dollar fell to the lowest levels for months against the euro and the yen on Friday as upbeat economic data reduced demand for the safe-haven greenback, dealers said.The euro rose to a near nine-month high of 1.4627 dollars in early London trading.The dollar dropped to 90.98 yen -- the lowest level since mid-February.In later London trade, the European single currency stood at 1.4591 dollars compared with 1.4583 dollars in New York late on Thursday.Against the Japanese currency, the dollar fell to 91.04 yen from 91.74 yen on Thursday.Gold headed back towards 1,000 dollars an ounce as the weak US unit made the metal cheaper for buyers holding rival currencies, pushing up demand, dealers said."The dollar continues to move lower setting a new low for the year against the euro... while the dollar has fallen more sharply against the yen," said Derek Halpenny, European head of global currency research at The Bank of Tokyo-Mitsubishi UFJ in London."Risk appetite has been supported by mostly positive economic data from China," he added.Chinese economic numbers fuelled dollar weakness on Friday and investor risk appetite, underlining hopes of a global economic recovery, said Rabobank International economist Jeremy Stretch.China said industrial activity expanded by 12.3 percent last month and retail sales jumped 15.4 percent, while urban fixed asset investment rose 33 percent in January-August due to massive government spending on construction.Traders snapped up the currencies of countries exporting commodities to the Asian powerhouse, notably the Australian dollar.In contrast to the upbeat Chinese data, Japan revised down its estimate of second-quarter growth to 0.6 percent, from an initial estimate of 0.9 percent.Most analysts meanwhile expect the dollar to weaken further amid a growing sense that recovery from the worst global economic crisis in decades is taking root.With the economic outlook brightening, traders tend to shun the dollar in favor of riskier currencies that appeared more profitable, like the euro.Elsewhere, the British pound strengthened after the Bank of England on Thursday left its monetary policy unchanged, holding its key lending rate at a record low 0.5 percent and maintaining emergency stimulus measures to prevent the economy from sliding deeper into recession.In London on Friday, the euro was changing hands at 1.4591 dollars against 1.4583 dollars late on Thursday, at 132.89 yen (133.81), 0.8747 pounds (0.8756) and 1.5148 Swiss francs (1.5141).The dollar stood at 91.04 yen (91.74) and 1.0380 Swiss francs (1.0381).The pound was at 1.6687 dollars (1.6651).On the London Bullion Market, the price of gold jumped to 998.88 dollars an ounce from 990.75 dollars an ounce late on Thursday.

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