(Xinhua)
Updated: 2007-12-22 14:49

New York -- The dollar fell against the euro and pound Friday on profit-taking after recent gains, but rose against Japanese yen as investors waded back into carry trades.

The dollar climbed back slightly against the euro following positive news that a major US bank could get a big cash infusion from a Singapore fund.

The Wall Street Journal reported that Merrill Lynch, facing hefty write-downs due to losing bets on subprime mortgages, is in advanced talks to secure a capital infusion of as much as US$5 billion.

The report helped ease credit concerns and prompted investors to sell the low-yielding yen again and buy high-yielding units in carry trades.

A US Commerce Department report released on Friday showed that consumer spending rose by 1.1 percent in November, the largest amount in three-and-a-half years.

The Federal Reserve's preferred inflation measure -- the year-over-year core personal consumption expenditures deflator -- rose to 2.2 percent, above the comfort level of 1 percent to 2 percent.

The new data may prevent the Fed from cutting interest rates again in January.

The euro bought US$1.4358 in late New York trading, up from US$1.4323l ate Thursday. The pound rose to US$1.9828 from US$1.9814.

The dollar slipped to 1.1564 Swiss francs from 1.1580 francs, and rose to 1.0075 Canadian dollars from 1.0007 Thursday. It rose to 114.08 Japanese yen from 113.05 yen.