The dollar fell from a one-month high against the euro as stocks declined amid concern losses in U.S. credit markets may widen.
U.S. consumer spending rose 0.6 percent in June following a 0.8 percent
increase in May, the Commerce Department said in Washington today. The
median forecast of 67 economists surveyed by Bloomberg News was for an
increase of 0.4 percent.
The Fed's preferred price gauge, known as the core measure which
excludes food and fuel, rose 0.3 percent last month after a revised 0.2
percent May gain. The median forecast was for a 0.2 percent increase.
Policy makers will keep their target rate for overnight loans between banks at 2 percent when they meet tomorrow.
``The dollar is very fragile for now,'' said Hidetoshi Yanagihara,
senior currency trader at Mizuho Corporate Bank in New York. ``Stocks
are falling and there's some bad news from the financial sector.''
The Standard & Poor's 500 Index fell for a third day, dropping 0.7
percent to 1,251.84. Stocks also fell in Europe and Asia. HSBC Holdings
Plc, Europe's biggest bank by market value, said emerging markets may
grow more slowly this year and first- half profit fell 29 percent as
bad loans rose in the U.S.
The pound fell against the euro for a third day and
dropped versus the dollar after an industry report showed the U.K.'s
construction industry shrank in July at the fastest pace in 11 years.
It weakened 0.6 percent to 79.28 pence per euro, from 78.79 pence on
Aug. 1.