UPDATES ON OCT 4 2008

OCT 4 SATURDAY

Dollar Posts Biggest Weekly Gain on Currency Funding Demand .

The dollar posted its biggest weekly advance ever against

the euro on a surge in demand for U.S. currency funding

amid a worldwide credit crunch.

The U.S. currency erased its gain versus the yen on

speculation the $700 billion financial bailout approved by

Congress today won't be an economic cure-all. The yen

dropped against major currencies including the euro and

the New Zealand dollar as approval of the rescue

encouraged investors to borrow in Japan to buy

higher-yielding assets.

The greenback rose 5.6 percent this week versus the euro,

the biggest increase since the 15-nation currency debuted

in 1999. It rose 0.2 percent to $1.3796 at 4:17 p.m. in New

York, from $1.3819 yesterday. The dollar fell 0.1 percent

to 105.19 yen, from 105.33, declining 0.8 percent this week.

The euro dropped 0.3 percent to 145.16 yen, from 145.55.

It fell 6.3 percent this week, the biggest drop ever.

Congress passed a financial-market bailout designed to

unlock credit markets, reversing a rejection by the U.S.

House of Representatives that caused global stocks to

plunge. The bill authorizes the government to buy

troubled assets from financial institutions reeling

from record home foreclosures.

U.S. payrolls shrank by 159,000 last month, following a

revised decline of 73,000 in August, the Labor Department

said today in Washington. It's the biggest loss in jobs since

2003. The unemployment rate stayed at 6.1 percent.

Futures on the Chicago Board of Trade showed an 82

percent chance that the Federal Reserve will cut the 2

percent target lending rate for overnight lending

between banks by a half- percentage point at its

Oct. 29 meeting, with the balance of bets on a reduction

of 0.75 percentage point. Futures showed no chance of

reduced borrowing costs a month ago.