Dollar gains on the Euro on better corporate news than expected (Bloomberg) (18-04-2008)

April 18 (Bloomberg) -- The dollar gained against the euro as speculation grows regarding the ability of financial firms to weather the credit-market turmoil.

The greenback also looked set for its biggest weekly gain this year versus the yen after Citigroup Inc. reported first- quarter revenue that beat analysts' estimates. The pound climbed to a two-week high against the dollar after the Wall Street Journal said the Bank of England may take infected mortgages off lenders' balance sheets.

The dollar traded at $1.5842 versus the common European currency as of 7:31 a.m. in New York, from $1.5908 yesterday. It was at 103.26 yen, taking its advance this week to 2.3 percent. The euro was at 163.66 per yen, from 163.03 yesterday.

Japan's currency was poised for a fifth days of declines against the Brazilian real, a favorite of so-called carry trades, in which investors get funds in a country with low borrowing costs and invest where returns are higher. The risk is currency swings erase profits.

The yen dropped 0.8 percent to 62.4447 against the Brazilian currency and was at 13.3185 versus the South African rand, a decline of 1.4 percent.

The ECB must act if more inflation risks emerge, Euro magazine quoted central bank council member Axel Weber as saying in an interview. The currency rose to a record high of $1.5983 against the dollar yesterday.

SourceBloomberg