Dollar rises from fresh lows vs euro

Growth at factories in the US mid-Atlantic region slowed in November, with the Philadelphia Fed business activity index, falling to 20.7 in November from 28.5 in October, below economists’ forecasts for an easing to 23.5.

‘‘The dollar is recovering because of position-adjustment,’’ said Manfred Wolf, director of foreign exchange at HVB Group in New York. ‘‘There was no follow-through on the euro and technically, $1.3085 was the objective. In today’s market scenario, we have fulfilled that objective,’’ he added. By early afternoon in New York, the euro fell to session lows against the dollar around $1.2942, despite a negative Philadelphia Fed report. ‘‘The problem is people are very, very long euro, and even with bad news for the dollar like the Philly Fed, the euro doesn’t rally. We’re seeing people take some profits off the table.’’

John Hazelton, director of foreign exchange, PNC Bank, Pittsburgh. Traders said the euro earlier touched record highs on speculation that Russia was altering its foreign exchange regime to give greater weight to the euro. Russia’s central bank later said the euro will play a greater role than the dollar in its foreign exchange targeting as trade volumes with Europe had increased. Against the Swiss franc, the dollar climbed 1 per cent to 1.1733 francs. Sterling, meanwhile, fell to $1.8483. The US dollar rose more than 1 per cent against the Canadian dollar to C$1.2080.

Initial claims for US jobless benefits fell to 334,000 in the week ended November 13 from a upwardly revised 337,000 the prior week, in line with Wall Street economists’ expectations.

‘‘It was a non-event for the dollar,’’ said Bob Lynch, currency strategist at BNP Paribas in New York. But he added that ‘‘these levels of claims are indicative of the improvement we saw in the October labor report.’’

US Treasury Secretary John Snow, speaking in Warsaw on Thursday, said the government’s position on the importance of a strong dollar remained unchanged and he downplayed suggestions that he was backing away from it.

That said, analysts remained cautious ahead of Friday’s G20 gathering, although they expected little action from the meeting, particularly after Snow emphasized on Wednesday that market intervention was ‘‘non-rewarding at best.’’

On Friday, the market will also be watching for any comment from Federal Reserve Chairman Alan Greenspan and European Central Bank President Jean Claude Trichet. They are scheduled to take part in a panel discussion in Frankfurt.

In Japan, officials stepped up their rhetoric against the rising yen, fueling some wariness in the market about the possibility that Japan might still step into the market around the yen’s four-year high of 103.40 yen per dollar hit in March. The dollar rose 0.3 per cent against the yen to 104.30 yen after hitting a low of 103.66 yen. —Reuters