Dollar rises as euro retreats

The greenback rebounds after reaching record lows last week, as currency traders take profits.

BERLIN (AP) -- The dollar rose against the euro on Monday as the European currency backed off all-time set highs last week.

The euro bought $1.4568 in afternoon European trading, down from $1.4673 in New York late Friday and well below its all-time record of $1.4752, reached earlier in Friday's session.

The British pound, which has been trading at its highest levels against the dollar since the early 1980s, sank to $2.0679 from $2.0909.

Paul Jackson, a senior forex dealer at CMC Markets, said currency dealers took some profits on the euro after its latest highs.

He added that the dollar "is regaining some significant ground against the pound as sliding business confidence seems set to pave the way for a rate cut at the Bank of England."

No U.S. economic data were expected on Monday, the Veterans Day holiday, to help the markets gauge the direction of the economy and interest rates. The dollar has been suffering from speculation that the Fed, which recently cut rates twice, may keep doing so even as its major European counterparts hold their rates steady.

U.S. government bond markets and related financial commodities markets are closed for the holiday. Other U.S. markets, including the stock markets, are open

Although lower interest rates can jump-start an economy, they can also weaken a currency as investors transfer funds to countries where they can earn higher returns.

The dollar weakened late last week after Federal Reserve Chairman Ben Bernanke said economic growth would slow noticeably in the U.S. in the coming months while rising oil costs would increase inflation pressures. source