Dollar rebounds as stocks slump

10:34, October 20, 2010      

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The U.S. dollar rebounded against major currencies in late New York trading on Tuesday as stocks slumped due to Bank of America's mortgage bonds problem.

Stocks plunged on Tuesday on a report that New York Fed and other eight firms planned to sue Bank of America over mortgage securities issues. Shares of Bank of America were more than 4 percent lower Tuesday. The Dow Jones Industrial Average fell nearly 200 points.

The dollar, which was regarded as a safe-haven investment, regained some favor from investors on Tuesday. The euro against the dollar slipped to below 1.38 and the dollar against the Japanese yen rose to near 82 in early trading session.

The dollar index, a gauge of its performance against a basket of six currencies, surged to 78.25, well above almost one-year low of 76 which it touched a few days ago.

In late Tuesday trading, the dollar bought 81.46 Japanese yen, compared with 81.21 late Monday, and the euro fell to 1.3744 dollars from 1.3998.

The British pound also fell to 1.5699 dollars from 1.5936. The dollar rose from 0.9571 to 0.9702 against Swiss francs, and also rebounded to 1.0339 Canadian dollars from 1.0145.



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