Dollar gains on most major currencies

AFX, September 8 – The dollar strengthened against most major currencies Friday as a sell-off in the yen bolstered the U.S. currency.

In afternoon New York trading, the euro bought $1.2676, down from $1.2728 in New York late Thursday. The British pound dropped to $1.8649 from $1.8748.

The dollar gained on the Japanese currency, climbing to 116.87 yen from 116.40.

The yen retreated against the dollar and other currencies after the Bank of Japan left its key interest rate unchanged at 0.25 percent early Friday.

Bank of Japan Gov. Toshihiko Fukui said the bank will continue to "adjust interest rate levels slowly" as Japan’s economy recovers, however.

Higher rates can boost a currency by attracting international investment.

The yen had been buoyed on Thursday when a German official said its weakness would be discussed at the G-7 meeting in Singapore this month.

"We saw an unwinding of the yen today, especially against the euro, as investors took profits," said Michael Woolfolk, a senior currency analyst at the Bank of New York. "The dollar benefited from that."

The dollar also has been boosted by economic data suggesting an increase in wage pressures, Woolfolk said.

On Thursday, the Labor Department delivered a new signal of strength in the labor market, reporting a bigger-than-expected drop in the number of newly laid off workers filing claims for unemployment benefits.

A report on Wednesday showed an uptick in labor costs in the second quarter — an increase that could help persuade the Federal Reserve to raise rates in the future.

In other trading, the dollar bought 1.2468 Swiss francs, up from 1.2429 late Thursday, and 1.1204 Canadian dollars, up from 1.1100.