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February 27, 2007 > Dollar down against other major currencies after Iran jitters

Dollar down against other major currencies after Iran jitters

NEW YORK (AP), Feb 23 _ The dollar fell against the other major currencies Friday after news of Iran's refusal to suspend uranium enrichment shook up investors.

The euro bought $1.3162 in afternoon New York trading, up from $1.3126 late Thursday.

The British pound rose to $1.9637 from $1.9563.

The dollar fell against the yen, dropping to 121.04 yen from 121.55 yen. The Japanese currency dipped Thursday even after the Bank of Japan, encouraged by signs of robust economic growth, raised its benchmark interest rate to 0.5 percent on Wednesday.

Investors were rattled after a U.N. official said Iran did not agree to Security Council demands to suspend its nuclear ambitions. Also weighing on the dollar was a U.S. government report that showed a larger-than-expected drop in gasoline and heating oil inventories, boosting crude prices above $60 a barrel.

Though blamed on worries about Iran, the weakening dollar was driven more by investors looking to sell the U.S. currency going into the weekend, said David Solin, a partner at Foreign Exchange Analytics in Essex, Conn.

``That got the market moving a little bit, and there was just a little bit of dollar-selling behind that,'' he said.

The Labor Department reported this week that applications for jobless benefits totaled 332,000 last week, down by 27,000 from the previous week. Consumer prices rose by 0.2 percent in January _ higher than the 0.1 percent increase Wall Street expected. Core inflation, which excludes volatile energy and food components, also rose more than expected, up 0.3 percent.

The Fed also released minutes from its January meeting, at which it held rates unchanged at 5.25 percent for the fifth straight time. The minutes said that inflation pressures posed the greatest threat to the overall economy, while a housing slump was less of a concern.

Higher interest rates, a weapon against inflation, support a currency by making some assets denominated in that currency more attractive to investors.

In other trading, the dollar bought 1.2332 Swiss francs, down from 1.2383 late Thursday, and 1.1592 Canadian dollars, dropping from 1.1607.

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