Dollar Decline Continues As Trade Deficit Widens

TALI ARBEL

NEW YORK (AP) — The dollar dropped Friday after the government said the trade deficit widened in September, while the 16-nation eurozone officially emerged from recession, luring investors away from the safe-haven dollar.

The buck has declined steadily since spring despite statements of support from government officials. Record-low U.S. interest rates and a recovering global economy encourages investors to transfer funds out of the safety of low-yielding dollar-denominated investments such as Treasurys and into higher-yielding assets like stocks, commodities and emerging-market currencies.

In late New York trading Friday, the 16-nation euro rose to $1.4893 from $1.4866 late Thursday, while the British pound jumped to $1.6672 from $1.6570. The dollar slipped to 89.63 Japanese yen from 90.32 yen.

The dollar also trudged lower against emerging-market currencies such as the Brazilian real, South Korean won and Thai baht — all countries that have struggled to weaken their currency against the dollar this year in order to keep their exports cheap and their economies in recovery.

The decline was "further confirmation that the overall, dominating theme in the market is still that of adding to risk rather than a cautious approach," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto. Every dip back in stocks and corresponding rise in the dollar since the rally began in spring has been a "fairly brief and shallow correction, until investors jump back on the buying-risky-asset bandwagon. Thats what we've seen playing out today once again."