UPDATES ON JULY 29 2008

JULY 29 TUESDAY

Dollar Trades Near 1-Week Low Against Euro Before Housing Data .

The dollar traded near a one-week low against the euro on

speculation an industry report today will show the U.S. housing

slump deepened, increasing the risk credit-market losses

will widen.

The dollar traded at $1.5746 per euro at 6:32 a.m. in London,

from $1.5741 late yesterday in New York and near a July 23

low of $1.5798. The U.S. currency weakened to 107.37 yen

from 107.46 yesterday, and to C$1.0213 against the

Canadian dollar from C$1.0226. The euro slid to

169.09 yen from 169.17.

U.S. stocks and the dollar fell yesterday even after U.S.

Treasury Secretary Henry Paulson called for banks to use

covered bonds more extensively to finance mortgages. Such

bonds require lenders to make good on payments in the

event that homeowners default. The U.S. mortgage market

currently depends on Fannie Mae and Freddie Mac and other

government-linked institutions for more than 70 percent of funds.

Nonfarm payrolls dropped by 75,000 in July, following a

decline of 62,000 in June, according to a Bloomberg survey.

The Labor Department will release the employment data Aug. 1.

Futures on the Chicago Board of Trade showed yesterday a

38 percent chance the Fed will increase its 2 percent target

rate for overnight lending between banks by at least a

quarter- percentage point by Sept. 16, compared with

41 percent odds a week earlier. Policy makers

next meet Aug. 5.

Gains in the yen may be limited after government reports

showed Japan's unemployment rate rose to the highest

in almost two years in June and household spending fell,

adding to signs the economy's longest postwar

expansion may be coming to an end.