The dollar declined against the euro as Israel’s assault on the Hamas-controlled Gaza Strip in response to rocket attacks raised concern exports of crude oil to the U.S. may be reduced. The currency also fell versus the yen before a report forecast to show U.S. home prices dropped in October, adding to concern the recession is deepening. The euro rose to near a record against the pound as charts analysts use indicated the currencies may reach parity this week. “We’re seeing a fair bit of unrest in the Middle East, and that’s having an impact,” said Harry Adams, a currency trader in London at Schneider Foreign Exchange, which counts FTSE- listed companies and wealthy individuals among its clients. “The oil price is having an effect, and we are likely to see more dollar weakness.” The dollar slid 1.7 percent to $1.4165 per euro at 7:16 a.m. in New York, from $1.3927 yesterday, when it reached $1.4364, the weakest since Dec. 18. The decline pared this year’s advance to 2.9 percent. The euro gained 1.2 percent to 127.76 yen from 126.26, trimming this year’s loss to 22 percent. The dollar weakened 0.5 percent to 90.21 yen from 90.68, extending its 2008 loss to 19 percent. Russia’s ruble strengthened against the dollar for the first time in a week, increasing 0.8 percent to 29.3538 after crude oil prices rose yesterday. The ruble fell 0.9 percent to 41.5538 against the euro and was little changed at 34.8189 versus a currency basket made up of 55 percent dollars and 45 percent euros. Bank Rossii Bank Rossii allowed the ruble to decline more than 1 percent against the basket 12 times since Nov. 11, according to a central bank official who declined to be identified. The ruble dropped 20 percent against the dollar since the beginning of August on a decline in crude oil prices this year. The euro rose for a seventh day against the pound, increasing 1.1 percent to 97.75 pence, its longest stretch of gains since early September. It reached 98 pence yesterday, the highest since the 15-nation currency’s 1999 debut. Charts used to predict price movements show the currencies may reach parity this week, according to Ashraf Laidi, chief foreign-exchange analyst at CMC Markets in London. “Euro strength is creeping across the board, hitting a fresh all-time high versus the pound, paving the path for parity as early as this week,” Laidi wrote in a research note yesterday. “One of the several factors making parity possible is remaining technical strength in the euro-dollar.” Moving Average Europe’s single currency may “retest” its 200-day moving average of about $1.4650, which is a 61.8 percent Fibonacci retracement of the decline from the record high of $1.6037 on July 15 to the Oct. 28 low of $1.2330, Laidi said. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. The greenback weakened 1 percent to $1.4536 against the pound and 0.9 percent to 1.0499 versus the Swiss franc after Israel indicated it may broaden its assault on Gaza Strip with a ground operation after three days of air raids failed to end cross-border rocket attacks. Crude oil for February delivery fell 1.8 percent to $39.31 a barrel on the New York Mercantile Exchange after advancing 6.1 percent yesterday on speculation Israel’s conflict with Hamas may disrupt Mideast oil supply. The U.S., the world’s largest user of energy, consumed 20.7 million barrels of oil a day in 2007, compared with the European Union’s consumption of 14.9 million barrels a day, according to the British Petroleum Statistical Review. “Rising oil prices make it more expensive for those in the U.S. to buy the commodity, especially when its economy is doing poorly and the weather is cold there,” said Yuji Saito, head of the foreign-exchange group at Societe General SA in Tokyo. “It’s extremely negative for the dollar.” The U.S. currency may weaken to $1.4200 per euro and 89.50 yen today, Saito said. U.S. Housing Home prices for the 20 largest metropolitan areas in the U.S. fell 17.9 percent in October from a year earlier, the biggest decline since record-keeping began in 2001, according to economists in a Bloomberg survey before the S&P/Case-Shiller index is published today. “The current environment is inconsistent with further dollar strength,” David Powell, a currency strategist in London at Bank of America Corp., said in an interview on Bloomberg Radio. The dollar may weaken to $1.48 by the end of March as the Federal Reserve cuts interest rates, Powell said. The central bank cut its benchmark interest rate this month to as low as zero for the first time and shifted its focus to debt purchases in an effort to revive the economy. The European Central Bank cut its main rate is 2.5 percent. The U.S. Treasury committed $6 billion to support GMAC LLC, the financing arm of General Motors Corp., widening the government’s effort to keep the largest U.S. automaker out of bankruptcy, according to a statement issued yesterday.

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