RTRS: FOREX-U.S. dollar gains broadly on safe-haven bid
The U.S. dollar rose against a basket of currencies on Friday as persistent worries about ailing banks and a global recession boosted the greenback's safe-haven appeal.
U.S. stock index futures pointed to a lower open on fears that the government's bank rescue plan might involve nationalization.
"The market has bigger fish to fry as it contemplates more long weekends as big decisions on the banking sector are confronted," said Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut.
"Negative risk is still ultimately seen playing at least mildly U.S. dollar positive."
The greenback has benefited from extreme risk aversion in recent months as investors sought relative safety in dollar-denominated assets such as U.S. Treasuries.
Early in New York, the dollar erased its losses versus the yen after a government report showed a rise in U.S. consumer prices in January, about in line with expectations, but the data's overall impact on the currency market was limited.
The ICE Futures U.S. dollar index, which tracks the value of the greenback against a basket of six currencies, was up 0.6 percent at 87.961 .DXY.
The Labor Department said consumer prices rose 0.3 percent in January after falling 0.8 percent in December. Analysts polled by Reuters had forecast headline CPI rising 0.3 percent. See [ID:nN19520115]. Core prices rose 0.2 percent, slightly above analysts' prediction for a 0.1 percent increase.
"It would have moved the market more had we seen a decline in CPI," said Aroop Chatterjee, senior currency strategist at Barclays Capital in New York. "Even though the report did not show deflation, it doesn't ease risk aversion in general. The dollar will continue to see safe-haven flows especially with the concerns about the euro zone and eastern Europe.
The euro pulled back after strong gains in the previous session, but it recovered from session lows on hopes for a solution to alleviate the euro zone's problems.
The euro was last down 0.6 percent on the day at $1.2582 , but up from a low of $1.2566, according to Reuters data.
The dollar was little changed versus the yen at 94.30 yen , while the euro lost 0.5 percent to 118.71 yen
