Forex - Dollar Drops Versus Euro

Dollar Drops Versus Euro on Concern Foreign Investors Can't Fund Trade Gap
March 15 (Bloomberg) -- The dollar declined against the euro after a Treasury Department report showed foreign purchases of U.S. securities were less than the amount needed to finance the trade deficit for a second-straight month.

International investors bought $66 billion of Treasury notes, corporate bonds, stocks and other financial assets in January, up from a revised $53.8 billion in December. Foreign investors need to exchange their currencies for dollars to buy U.S. securities.

``This is a slight negative for the dollar, because the number came out below the trade deficit,'' said Greg Anderson, a currency strategist with ABN Amro NV in Chicago.

The dollar dropped to $1.2034 against the euro by 10:50 a.m. in New York from $1.2013 late yesterday. The U.S. currency was little changed at 117.55 yen, and was lower versus 14 of 16 most actively traded currencies tracked by Bloomberg.

The dollar slumped yesterday after a government report showed the U.S. current-account deficit widened to a record in the fourth-quarter.