UPDATES ON AUG 28 2008

AUG 28 THURSDAY

Euro Rises for Second Day on Speculation ECB Won't Lower Rates .

The euro rose against the dollar for a second day on speculation

the region's interest-rate advantage over the U.S. will draw

investors after a European Central Bank official signaled a

cut in borrowing costs is unlikely.

The euro rose to $1.4778 at 7:18 a.m. in London from $1.4727

yesterday in New York. The currency traded at 161.05 yen

from 161.27. Against the pound, it appreciated 0.3 percent

to 80.49 pence, near a record high of 80.99 pence on

April 16.

Traders reduced bets that the central bank will cut its 4.25

percent main refinancing rate next year. The implied yield

on the Euribor futures contract expiring in September 2009

rose 11 basis points, or 0.11 percentage point, to 4.43 percent

yesterday.

Crude oil rose for a fourth day to reach $119.10 a barrel on

forecasts Tropical Storm Gustav will strengthen as it enters

the Gulf of Mexico, home to 26 percent of U.S. production.

The euro-dollar exchange rate and oil had a correlation of

0.9 in the past year, according to Bloomberg calculations.

Declines in the dollar may be limited before revisions to the

second-quarter gross domestic product report from the

Commerce Department today. The U.S. economy

expanded an annualized 2.7 percent, faster than

preliminary data showing 1.9 percent growth, according

to a Bloomberg survey of 78 economists.

The Dollar Index traded on ICE Futures in New York declined

0.4 percent to 76.779 from 77.051 late in New York yesterday.

It reached an eight-month high of 77.619 on Aug. 26.