The
dollar rose to a six-week high against the euro before a Federal
Reserve meeting today at which policy makers may leave interest rates
on hold and highlight concern that inflation needs to be contained.
The
U.S. currency also climbed against the British pound after a report
yesterday showed personal spending exceeded forecasts and as crude oil
fell to a 13-week low, adding to optimism lower fuel prices will help
sustain U.S. economic growth. The yen rose against all 16 major
currencies tracked by Bloomberg as concern that financial-market losses
are deepening reduced demand for higher-risk investments funded in
Japan.
``I'm definitely not a seller of the U.S. dollar
against the euro,'' said Andrew Gordon-Mackay, chief executive officer
of Absolute Asset Management, a Melbourne-based currency hedge fund.
``The dollar is close to its medium-term bottom and reasons for selling
the currency are already in the market. The euro area's outlook, on the
other hand, is starting to turn negative.''
The Federal
Open Market Committee is scheduled to announce its decision at about
2:15 p.m. in Washington. The benchmark rate will be held at 2 percent,
according to all 69 economists surveyed by Bloomberg News.
The euro weakened on speculation a slowing economy will deter the European Central Bank from raising interest rates.
Retail
sales in the 15 countries that share the euro fell 1.3 percent in June
from a year earlier, reversing a 0.3 percent gain in May, according to
a Bloomberg News survey. The European Union's statistics office will
release the data at 11 a.m. in Luxembourg today.
The ECB
will leave its benchmark rate on hold at 4.25 percent when it announces
a decision on Aug. 7, a separate survey showed. The ECB raised rates by
a quarter of a percentage point on July 3 to curb the fastest inflation
in 16 years.