NEW YORK (AP) -- The dollar rose to a 2008 high against the euro and a fresh 28-month high against the pound Thursday after the European Central Bank held its interest rate steady and cut growth forecasts for the euro zone.

The 15-nation currency dropped to $1.4331 from $1.4493 late in New York Wednesday after earlier touching a new 2008 low of $1.4319.

The ECB held its interest rate at 4.25 percent, as expected, as it struggles to balance accelerating inflation with slowing economic expansion. But the central bank cut its growth forecasts for 2008 and 2009 as it raised its inflation outlook. It said GDP growth in the euro zone would be from 1.1 percent to 1.7 percent in 2008, and from 0.6 percent to 1.8 percent in 2009, lower than previous estimates.

The British pound dropped to $1.7690 from $1.7759 after glancing off a fresh 28-month low of $1.7625. While the Bank of England also kept its key interest rate steady, at 5 percent, rate cuts are expected amid a housing crisis and economic stagnation in England, wrote Ashraf Laidi, chief currency strategist at CMC Markets US in New York, in a research note.

Higher interest rates can support a currency as investors transfer funds to where they can get better yields, while also helping to tamp down inflation. Cutting rates can weaken a currency while spurring economic growth.

"The euro zone is headed to recession," said Win Thin, currency strategist at Brown Brothers Harriman

Over the past few years, FX markets have exploded in popularity amongst retail traders. Hard to say if that was due to heavy promotional efforts from the industry itself, or whether the continual pumping of FX trading is a result of increased interest and demand. In any event, there are a lot of misconceptions and mistruths floating out there that need to be addressed. Most of the myths involve spot currency aka "FX" markets but some include currency futures, too.

Currency Markets Are Totally Random

Not at all... nothing could be further from the truth. An individual's stock price movement can be pushed up, down or sideways by an endless procession of factors. Part may be economic, part fundamentals to specific company, industry or sector. Another part of stock market action is pure emotion. Someone makes or sells a widget with perceived value higher than what turns out to be economic reality. Doesn't matter... stock prices can remain pumped on pure emotion longer than rational people can comprehend.

Currency markets aren't like that. They are purely supply and demand, a commodity if you will. Each currency is weighted on economic conditions for that specific denomination versus any or all others in the marketplace. Price value of currencies is nothing more than a reflection of where that denomination's economy ranks as weak or strong relative to others. There is no sentimental or emotional impact on a currency. No one buys the British Pound to unreasonable heights because they like the color scheme of those bills. No one sells the USD/CHF because that country has great skiing in the winter; therefore it's a "play" to profit from guesswork of increased tourism. If the Swiss economy is weak or strong, it'll be amply

BERLIN (AP) -- The euro recovered some ground against the U.S. dollar on Wednesday after hitting a six-month low the previous day.

The euro bought $1.4692 in morning European trading, up from $1.4650 in New York late Tuesday and well above the $1.4569 it bought earlier in Tuesday's session.

The British pound, which on Tuesday hit a 25-month low, rose to $1.8420 from $1.8389. The dollar also gave up ground against the Japanese currency, declining to 109.22 yen from 109.63 yen.

The dollar slipped as oil prices rose in Asia on concerns that Tropical Storm Gustav may disrupt operations in the Gulf of Mexico, home to a quarter of U.S. crude production.

The dollar had risen sharply on Tuesday as two U.S. economic reports came in better than expected, while surveys showed business and consumer confidence dropping in Germany, the 15-nation euro zone's biggest economy.

In addition, the Federal Reserve released notes from its Aug. 5 meeting indicating that the next move for U.S. interest rates would be upward. Higher interest rates can boost a currency as investors transfer

NEW YORK (AP) -- With oil prices seesawing, the dollar bounced back against the euro and the pound Wednesday after a two-day drop.

The 15-nation euro slipped to $1.4741 in late New York trading from $1.4768 Tuesday, while the British pound fell to $1.8615 from $1.8660.

The U.S. Energy Department said Wednesday a big gain in imports drove crude inventories up by a hefty 9.4 million barrels in the week ended Aug. 15, a figure much higher than analysts expected.

Light, sweet crude for September delivery rose near $115 a barrel on the New York Mercantile Exchange. Earlier in the session, it climbed as high as $117.03 before the inventory data was released, then fell as low as $112.61, only to rebound again.

Investing in oil futures has been a hedge against a sliding dollar, but oil's weekslong drop has helped support the dollar. The prices of the two have tended to move in opposite directions.

Meanwhile, shares of mortgage giants Fannie Mae and Freddie Mac continued to sink Wednesday on worries that the government-chartered companies will need a bailout from the Treasury Department, a move that could wipe out shareholders' equity.

The dollar dropped earlier in the week as crude futures surged, the financial sector worried Wall Street and the U.S. government said wholesale prices jumped higher in July.

LONDON -- The buck may be turning into a bull.

The U.S. dollar extended its recent rally against major currencies on Friday as commodities fell and European and Japanese economies faltered. After sliding for years, the dollar may finally be on the way back up, some analysts argue.

The currency rose against the pound for the 11th straight day on Friday, to $1.85 -- its longest winning streak in 37 years. As recently as July, one pound would buy two dollars. At the same time, the dollar climbed to its strongest level in almost six months against the euro, which fell to $1.47, and to near a seven-month high versus the yen.

So far, the trend has helped push oil prices lower. Long term, a stronger dollar has a range of consequences. It makes imports cheaper for Americans, and makes it more expensive for foreign companies to buy U.S. assets such as Anheuser-Busch Cos., which is being sold to Belgian-based brewer InBev for $52 billion.

A stronger dollar would probably come as a relief to many European businesses, too, since it makes their exports to the key U.S. market more price-competitive.

The dollar reached an all time low on July 15 of $1.60 to the euro, down from a peak of 82 cents to the euro in 2000. The dollar's decline is blamed on the large U.S. trade and budget deficits, investment flows out of the United States, and lately by interest rate cuts by the Federal Reserve.

Some think it's only up from here. The dollar is now benefiting from the widespread sense that prices for

SHANGHAI, China (AP) -- The Chinese yuan gained against the U.S. dollar on Wednesday, hitting a fresh high as American and Chinese officials resumed talks centering on trade and other strategic issues.

Washington wants Beijing to loosen controls on currency trading and allow the yuan's rate to set by market forces. U.S. manufacturers contend that the restrictions keep the yuan's value artificially low, giving Chinese exporters an unfair advantage and boosting China's trade surplus.

The yuan has gained about 20 percent against the U.S. dollar since Beijing revamped its foreign exchange trading system in July 2005, revaluing the currency by 2.1 percent to 8.11 yuan to one dollar.

On Wednesday, the yuan began trading at a 6.8823 to the dollar, continuing a steady advance against the dollar that has taken it to record highs in recent weeks. It was trading at 6.8827 by Wednesday afternoon on the over-the-counter market, stronger than Tuesday's close of 6.8914.

China has pledged to loosen currency controls, but has not given any timetable, saying that sudden change would expose the country's shaky financial system to excessive risks from outside speculators.

During the talks in Annapolis, Md., China's central bank governor, Zhou Xiaochuan, alluded to such risks by asking about the regulatory mistakes that may have helped precipitate recent U.S. financial troubles.

"China always hopes to draw lessons from the U.S. experience in macroeconomic management and market

The US dollar weakened significantly this past week as rising oil prices revealed the vulnerabilities of the US economy. Companies are beginning to struggle and have been forced to come up with more creative ways to deal with the energy crisis. With crude oil prices hitting $135 a barrel and gasoline in many states topping $4 a gallon, US companies are making cuts across the board. Ford Motors Co for example plans on reducing production while American Airlines will be lowering capacity by 15 percent and adding bag charges. According to the futures market, some traders even expect gas prices to hit $7 to $8 a gallon. However the US is not alone in having to deal with the oil crisis which is one of the major reasons why the dollar has weakened. Over the past few weeks, the market had been slowly pricing in a pause from the Federal Reserve. At the same time, there was a growing consensus that other central banks may need to begin or continue to cut interest rates. The surge in oil prices and hawkish comments from the European Central Bank, the Bank of England and the Reserve Bank of Australia dramatically altered the outlook for these central banks. With strict inflation targets, traders came to realize that interest rates for these 3 countries will remain unchanged for the foreseeable future and as a result, currency rates adjusted for these expectations. In the coming week, the vulnerabilities of the US economy may become even more apparent. The US markets are closed for Memorial Day on Monday, but we still have a busy week ahead of us with consumer confidence, new home sales, durable goods, first quarter GDP, personal income, personal spending and Chicago PMI due for release. We expect most of these numbers to be dollar

The US dollar continued on its road to recovery as it advanced against most of the major currencies, and soaked in the biggest gains against the low yielding Swiss franc and Yen as investors moved into higher yielding assets. As a result, the New Zealand and Australian dollar were the only currencies to advance against the greenback, while the Canadian dollar failed to follow its currency partners amid a rise in commodity prices. The US dollar also rallied against the European currencies as the euro dipped to 1.541, while the British Pound inched lower to trade in the 1.973 range.

Fresh economic data supported the US dollar rally as labor conditions marked a surprising improvement, with growth prospects improving as export demands remain resilient. The Non-Farm Payroll index came in much better than what the markets had expected as it was released at -20K against forecasts for a -75K reading due to heightened growth in the services sector. As a result, the Unemployment Rate dropped to 5.0 percent from 5.1 percent, with Manufacturing Payrolls also reflecting an improvement as it rose to -46K from -48K. The Factory Orders index added to the improved outlook as the index surged to 1.4 percent from minus 0.9 percent due to a rise in export demands.

Improved economic data fostered early morning gains in the securities market, but failed to hold its ground as investors sold off their securities to round up profits. As a result, the DJIA picked up 48.20 points to hold off at 13,058.20 points after rising above 13,100 early on in the session, with 22 of the 30 components advancing. Among the broader indices, the S&P500 rose 4.56 points to 1,413.90, with 148