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07/21/2006 12:44 AM
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Report Copyright Violation | Dollar May Decline on Concern Bernanke to Pause Rate Increases Dollar May Decline on Concern Bernanke to Pause Rate Increases [ link to www.bloomberg.com] SNIP
July 21 (Bloomberg) -- The dollar may fall for a third day against the euro after minutes of the Federal Reserve's last meeting and comments from Chairman Ben S. Bernanke suggested the Fed is close to stopping two years of interest-rate increases.
Reports next week may show declines in U.S. home sales and consumer confidence, adding to evidence the Fed's 17 straight rate increases are slowing growth. Investors may switch to the euro on speculation the European Central Bank will outpace the Fed and the Bank of Japan in raising rates this year.
``The Fed is closer to ending its tightening cycle on concern over the slowing economy,'' said Jun Kitazawa, head of foreign exchange in Tokyo at BBH Investment Services Inc., a unit of Brown Brothers Harriman. ``The dollar is heading south.''
The dollar traded at $1.2648 per euro at 11:53 a.m. in Tokyo, from $1.2627 late yesterday in New York. It was at 116.82 yen from 117.04. The euro bought 147.79 yen, from 147.80 yesterday, when it reached a record 147.88 yen.
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