US dollar rises amid inflation concerns

Updated: 2008-01-08 09:09

NEW YORK -- The dollar rose across the board Monday as investors speculated that growing inflationary pressure could prevent Federal Reserve from cutting interest rate aggressively later this month.

A report of US Labor Department released Friday showed that the nation's unemployment rate rose to its highest level since November 2005.

The report prompted some institutions to call for the benchmark rates to be slashed by 50 basis points to 3.75 percent on January 30. But analysts said inflation pressure would more likely to see the Fed cut rates by 25 basis points.

There was also a reluctance to continue selling the dollar, regardless of poor economic data, because the dollar's decline appeared close to bottoming out, analysts said.

Attention this week will focus on Fed Chairman Ben Bernanke's speech Thursday as well as the European Central Bank and Bank of England meetings.

The euro was worth 1.4696 dollars in late New York trading, compared with 1.4773 dollars Friday. The British pound fell to 1.9697 dollars from 1.9723 dollars.

The dollar gained to 109.03 Japanese yen Monday from 108.45 yen and rose to 1.1162 Swiss francs from 1.1056 Swiss francs. It also rose to 1.0061 Canadian dollars from 1.0018 Canadian dollars late Friday.

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