Dollar muted, but keeps rising on Swiss franc

AP News
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Posted: Aug 12, 2011 3:32 PM
Dollar muted, but keeps rising on Swiss franc

The dollar was little changed Friday after mixed reports on the U.S. economy.

Retail sales posted a strong jump in July. Consumers spent more than they had in four months. But a survey that measures consumer confidence fell to a 30-year low. Shoppers may not want to spend much if they are worried about their jobs and a diving stock market.

Meanwhile, uneasiness about the health of major economies of countries that use the euro kept a lid on the common currency, despite the gain in European stock markets after regulators moved to protect shares of European financial companies from investors who want to sell them short.

France, Europe's second biggest economy, said on Friday that economic growth was flat in the second quarter, suggesting that it may have to cut government spending even more deeply. Investors have been scared by speculation that France may lose its AAA credit rating.

The euro strengthened to $1.4245 from $1.4216 in late afternoon trading. The British pound rose to $1.6280 from $1.6213, while the dollar dipped to 76.75 Japanese yen from 76.83 yen.

But the U.S. currency added to its sharp climb this week against the Swiss franc. Swiss officials on Thursday hinted that they could take more action to weaken the franc after its huge gains against the dollar and euro this year, beyond what they've already done this week.

The Swiss currency, like the Japanese yen and gold, has benefited this year because traders consider them safe havens. They tend to gain during market turmoil, when investors fear a slowdown in global growth or a financial crisis.

The dollar was worth 0.7767 Swiss franc from 0.7636 franc late Thursday. The dollar on Tuesday hit a record low of 0.7062 Swiss franc. It had dropped more than 30 percent against the currency this year.

Elsewhere on Friday, the dollar rose to 99.04 Canadian cents from 98.65 cents.