The dollar rose against the euro and the yen

The dollar rose against the euro and the yen after reports showed a strengthening U.S. economy, rising Treasury yields to a demand for seven months and the improvement of assets denominated in U.S. currency. UU ..

The euro erased earlier gains against the dollar as European Union leaders launch a two-day summit in Brussels with the focus on a permanent system to combat the crisis. The dollar strengthened against most of its counterparts in Treasuries erased gains after housing construction rose more than expected jobless claims declined insurance and regional economic index accelerated at the fastest pace since 2005. The Brazilian real rose as the government tries to stimulate the market for corporate debt.

"The bowels of the Philadelphia Fed was inflation," said Lane Newman, director of ING Groep NV in exchange for New York. "That is why they are selling the bonds a bit, buying the dollar."

The dollar rose 0.2 percent to $ 1.3198 at 11:07 am in New York from $ 1.3214 yesterday. The dollar gained 0.1 percent to 84.34 yen from 84.24 yen.

The Philadelphia Fed said its general economic index, a gauge of regional manufacturing rose to 24.3 this month from 22.5 in November. The median forecast of 59 economists was for a fall to 15. A reading above zero signals expansion in eastern Pennsylvania, southern New Jersey and Delaware.

Reading Economic

Initial claims for unemployment benefits fell to 420,000 in the week ended Dec. 11 from a revised 423,000 in the previous period, the Department of Labor. Residential construction advanced 3.9 percent to an annual rate of 555,000 in November after a fall of 11.1 percent in the previous month and decreased 2.1 percent in September, the Commerce Department reported .

"The Philly Fed was stronger than the market expected," said Amelia Bourdeau, senior currency strategist in Stamford, Connecticut, at UBS AG. "The prices paid component increased, which means higher inflation."

EU leaders were close to reaching an agreement on amendments to the bloc's Lisbon Treaty which provides a "mechanism to safeguard the stability of the euro area as a whole" with the financial support for governments in trouble "subject strict conditions, "he told reporters officials yesterday.

The divisions among the leaders on new measures to stem the debt crisis have helped push the euro up 2.1 percent lower last month compared to the currencies of 10 developed countries tracked by उस
correlation-weighted indices .

Change Limited

"Based on the statements made, the most radical changes will not be discussed, as the euro bond proposal," said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. "It is clear that not everyone is on board changes."

The Frankfurt-based European Central Bank will increase its capital by 5 million euros (6.6 billion U.S. dollars) to 10.76 million euros, from December 29, said in a statement.

"The capital increase is considered appropriate in light of increased volatility in exchange rates, interest rates and gold prices, as well as credit risk," the ECB said.

"Imagine the ECB as private sector funds and the amount of capital they have in comparison to the amount of assets," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. "Most hedge funds do not exploit more than 10 to 1 and its influence is now 160 times."

Dollar Index

The dollar index, which the ICE used to track the greenback against the currencies of six major U.S. trading partners, has gained 0.6 percent since Dec. 6 and yields Treasuries have risen to their highest in seven months.

U.S. 10-year yields rose eight basis points to 3.56 percent.

Brazil is going to reduce taxes and provide incentives to stimulate corporate debt market and the supply of long-term credit for investment in infrastructure to host the 2014 World Cup and 2016 Olympic Games.

Capital Taxes

The tax on foreign capital inflows than tripled this year will decline to 2 percent from 6 percent for private equity investors based abroad who want to finance the Brazilian unit of infrastructure.

The Finance Minister Guido Mantega, said the state development bank BNDES called aside 10 billion reais ($ 5.8 billion) to buy longer-term debt issued by borrowers corprate. The measure will help provide liquidity to the secondary market for the paper.

Brazil's currency rose against most of its more commercialized and strengthened as much as 0.5 percent to 1.7109 per dollar.

The New Zealand dollar hit a 10-year low against its Australian counterpart. The kiwi fell from a seventh day against the Australian dollar, the longest losing streak in 18 months, after industry reports showed consumer confidence and business of the smallest nation vanished.

New Zealand dollar fell 0.2 percent to $ 1.3384 in New Zealand against Australia.