The dollar traded near the lowest level in more than two weeks against
the euro before an industry report this week that may signal the worst
housing slump in a quarter of a century is deepening.
The currency fell the most against the Canadian dollar and the Mexican
peso before the report May 23 that is forecast to show home sales
dropped for a second month. The yuan rose to the highest level since
the end of its dollar link in 2005 after U.S. Treasury Undersecretary
David McCormick urged China to quicken currency reforms. South Korea's
won declined on concern the government will act to curb short-term
external borrowing, reducing the supply of dollars.
The U.S. dollar last week fell the most against the euro since March as
a slide in consumer confidence to a 28-year low and record oil prices
raised concern U.S. economic growth will slow.
Losses in the U.S. dollar may be limited by speculation minutes from
the Federal Reserve's meeting last month will show policy makers are
concerned that rising commodity prices will fan inflation. The Fed on
May 21 will release minutes of its April meeting, where the
policy-setting Federal Open Market Committee cut the benchmark interest
rate by a quarter point to 2 percent.
``I'd still be looking for any potential long position in the dollar,''
Tobias Davis, senior currency dealer at Custom House Global Foreign
Exchange in Sydney, said in an interview with Bloomberg Television.
``The U.S. is importing inflation through food and crude oil. I think
the FOMC is pretty confident in sitting tight at 2 percent.''
The yen's advance against the dollar may stall at about 103, said Yuji
Saito, head of the foreign-exchange sales department at Societe
Generale SA in Tokyo, citing a technical indicator. The 103 level is
the baseline of a so-called Ichimoku chart, which analyzes the
midpoints of historic highs and lows, he said.