Dollar hits 7-1/2-month low vs yen

NEW YORK: The dollar fell to a 7-1/2-month low beneath the key 90-yen level on Friday after the G20 pledged to continue emergency stimulus spending until a recovery takes hold, suggesting US interest rates would remain very low. The yen also got a boost after an influential former Japan finance official told Dow Jones Newswires that authorities were not likely to try halting yen gains unless the dollar fell below 85 yen. The dollar fared better against sterling, which fell to multi month lows a day after Bank of England Governor Mervyn King said a weak pound would help exports and the UK economy. But the euro edged higher against the greenback, helped by encouraging data showing that US consumer sentiment hit its highest level this month since January 2008. Stocks and the euro have focused on the improvement we ve seen in consumer confidence, said Kathy Lien, director of FX research at GFT Forex in New York. Stocks and currencies such as the euro are seen as reliant on strong global growth and tend to rally on good economic news, while the dollar often gets a bid when data is weak. The dollar was last down 1.6 per cent at 89.85 yen after hitting 89.78 yen earlier, the lowest since February. The euro also fell 0.9 per cent to 132.49 yen. The euro rose 0.3 per cent to $1.4701, boosted after encouraging US consumer sentiment data and a separate report showing new homes sales edged up in the United States in August. The pound fell to $1.5917, its lowest since early June, before edging back to $1.5986, down 0.4 per cent. It sank against the yen, falling as low as around 144.30 yen, its weakest since mid-May.