Dollar Hits Highest Levels Since Attacks

The buck is back--at least for now.

The dollar Thursday climbed to its strongest levels against the euro and yen since the Sept. 11 terrorist attacks, boosted by gains in U.S. stocks and optimism the economy will recover in coming months.

“The dollar’s expressing the view that U.S. military efforts are going well” and that the U.S. economy will rebound soon, said Jeremy Fand, head of currency strategy at UBS Warburg in Stamford, Conn. Fand’s group Thursday advised clients to sell the euro against the dollar.

The greenback reached 90.03 cents per euro, from 91.10 late Wednesday in New York, reaching its strongest level since 89.55 on Sept. 11. The dollar climbed to 121.41 yen from 120.39 on Wednesday, at one point touching its highest level since 122.04 on Sept. 11.

After tumbling to a six-month low of 93.31 cents per euro and a seven-month low of 115.83 yen after the attacks, the dollar has rebounded as the Federal Reserve cut interest rates and President Bush promised stimulus measures.

The dollar also surged 1.3% on Thursday against the Swiss franc, its biggest gain since Sept. 4. The franc rallied the most among major currencies after the Sept. 11 attacks as investors sought the franc’s perceived safety, given Switzerland’s neutrality and current account surplus. On Sept. 11, the franc posted its steepest one-day gain in four years.

In trading Thursday, the dollar reached its highest levels amid speculation Osama bin Laden had been captured. The talk was sparked as Middle Eastern investors were seen selling Swiss francs, traders said.

The dollar also advanced against the euro and yen after a U.S. report showed the number of workers filing claims for unemployment benefits unexpectedly fell last week, tempering concern the economy is headed for recession.

Also hurting the euro, the European Central Bank kept interest rates unchanged, raising concern it is doing too little to foster growth in the 12 economies sharing the euro.