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FOREX-Dollar rises on US data; Greece woes weigh on euro

Published 01/15/2010, 09:44 AM
Updated 01/15/2010, 09:48 AM

* Dollar supported by manufacturing, prices data

* Greece concerns weigh on euro

By Vivianne Rodrigues

NEW YORK, Jan 15 (Reuters) - The dollar rose against the euro on Friday after U.S. data showed a rise in manufacturing and tame consumer prices last month.

Demand for the euro fell as concerns about the struggling Greek economy highlighted weakness in the euro zone and bolstered expectations interest rates in the region will stay low for months.

Analysts noted the reports on U.S. industrial output, New York regional manufacturing and consumer prices were consistent with markets' expectations and said the data may help pave the way for further gains in the dollar.

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"It's not a surprise to see better-than-expected manufacturing data. A point of this recovery, outside of fiscal stimulus, is that the U.S. manufacturing sector is already on the rebound," said Michael Woolfolk, a senior currency strategist at The Bank of New York Mellon in New York.

He said euro/dollar may trade as low as $1.4280 in the coming days.

In morning trading in New York, the euro was 0.8 percent lower at $1.4392 after trading as high as $1.4511 earlier.

Analysts said the market was uncertain about how Greece would repay its debts and that speculation remained high it would probably face difficulties pushing through any recovery plan, hurting the single currency.

"Concerns over Greece will weigh on the euro until the Ecofin's judgment on the government's latest fiscal plan," said Chris Turner, head of currency strategy at ING.

The Ecofin group of European Union finance ministers will judge the plan next month at the earliest.

Against the yen, the dollar was little changed at 91.08 yen as investors awaited for the release of a preliminary reading on U.S. consumer confidence later in the morning.

(Additional reporting by Steven C. Johnson in New York and Neal Armstrong in London; Editing by Dan Grebler)

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