UPDATES ON AUG 27 2008

AUG 27 WEDNESDAY

Dollar Falls on Speculation Reports to Show Flagging Spending .


The dollar fell from a six-month high against the euro

and dropped versus the yen on speculation weakening

U.S. business and consumer spending will delay a Federal

Reserve interest-rate increase.

The greenback retreated from a two-year high against the

British pound as economists forecast U.S. data this week

will show declines in durable goods orders and slowing

consumption. The Australian dollar rebounded from

an 11-month low as rising Asian stocks gave investors

confidence to buy higher-yielding assets overseas.

The dollar declined to $1.4685 per euro at 8:14 a.m. in

London from $1.4653 in New York yesterday, when it

touched $1.4571, the strongest since Feb. 14. The dollar

fell to 109.23 yen from 109.60. The euro was at 160.43

yen from 160.64 yesterday. The dollar slid to $1.8409

versus the pound from $1.84. It rose yesterday to $1.8331,

its highest since July 2006.

Futures on the Chicago Board of Trade show a 22 percent

chance that the Fed will increase its 2 percent target rate

for overnight lending between banks by at least a quarter

-percentage point at a Dec. 16 meeting, compared with

70 percent odds a month ago. Policy makers next meet

Sept. 16 .

Bookings for U.S. goods made to last several years were

unchanged in July, compared with a gain of 0.8 percent

in June, according to a Bloomberg News survey of

economists before a Commerce Department report at

8:30 a.m. today in Washington. A separate report on

Aug. 29 may show personal spending rose 0.2 percent,

less than half the 0.6 percent gain in June, according

to a separate survey.

Gains in the euro may be limited by speculation German

inflation slowed this month, reducing pressure on the

European Central Bank to raise borrowing costs.

The ICE futures exchange's Dollar Index, which compares

the greenback against the currencies of six U.S. trading

partners, was last at 76.880 from 77.251 yesterday.

It rose to 77.413 on Aug. 19, fell to 76.022 on Aug. 21

and then rose yesterday to a second peak at 77.619.