UPDATES ON SEPT 18 2008

SEPT 18 THURSDAY

Dollar Drops for Second Day on Speculation More Banks to Fail .

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

a seizure in credit markets will cause more financial institutions to fail.

The currency also fell against the Swiss franc after a record slump

in shares of Goldman Sachs Group Inc. and Morgan Stanley, the

only remaining independent brokerages on Wall Street. The cost

of borrowing in dollars for three months jumped the most since

1999 as a U.S. government takeover of American International

Group Inc. failed to ease concern debt losses will spread.

The U.S. currency fell to $1.4370 per euro as of 6:30 a.m. in

London from $1.4326 late yesterday in New York. The dollar

was little changed at 104.60 yen. It touched 103.54 on Sept. 16,

the weakest since May 27, and Amikura says the currency may

fall to 103.80 yen in the coming days. It declined to 1.0997

Swiss francs from 1.1029. The yen was at 150.34 per

euro from 149.88.

The dollar also fell on concern the credit slump will cool the world's

largest economy. U.S. housing starts fell 6.2 percent in August to

an annual rate of 895,000, the lowest since January 1991, the

Commerce Department said yesterday. Building permits, a

sign of future construction, dropped 8.9 percent to an

854,000 pace.

The Federal Reserve kept its target rate for overnight lending

between banks at 2 percent on Sept. 16, rebuffing calls by some

investors for an interest-rate cut.

The yen jumped 3 percent against the dollar on Sept. 15, the most in

a decade, as Lehman Brothers Holdings Inc. filed for the biggest

bankruptcy in history, sparking a global stock market rout and

a surge in bank loan costs.