American focus: dollar is supported

The dollar rose against the euro for the first time in three days as U.S. stock indexes advanced and crude oil prices fell. The U.S. currency strengthened from a six-week low as the yield advantage of German government debt over comparable- maturity Treasuries narrowed. The dollar fell last week the most against the euro in two months. The dollar remained higher versus the euro after an industry report showed an unexpected increase in Americans signing contracts to buy existing homes in April. The index of pending home resales rose 6.3 percent to 88.2, the highest in six months, following a 1 percent drop in March, the National Association of Realtors said today. The median forecast of 32 economists surveyed was for a 0.4 percent drop.The British pound rose to a one-week high against the dollar after a government report showed producer-price inflation accelerated in May to the fastest pace in two decades. The Bank of England held the target lending rate at 5 percent last week.
The yen dropped versus all of the major currencies today after a government report indicated Japan's longest postwar expansion may be over.
UBS AG, the second-biggest currency trader, cut its one-and three-month dollar forecasts against the euro to $1.60 and $1.53, from $1.50 and $1.47, previously.

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