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Dollar extends losses after loan officer survey

By Laura Mandaro, MarketWatch

Last Update: 5:16 PM ET May 5, 2008

SAN FRANCISCO (MarketWatch) — The U.S. dollar deepened its losses in late
afternoon trading Monday after a downturn in stocks and an unsettling report on
the progress of the credit crunch offset a surprisingly upbeat report on the U.S.
services sector.

At the start of a trading week dominated by the European Central Bank meeting
Thursday, the U.S. dollar index fell 0.4% to 73.19 from 73.497 in late trading
Friday.

The greenback extended losses against the euro, with one euro buying $1.5491, up
from $1.5428 late Friday.

The dollar also steepened its loss against the Japanese yen. One U.S. dollar was
recently buying 104.84 yen, down from 105.31 yen late Friday.

U.S. trades followed light overseas action. Some financial markets and many
businesses were closed in London for a bank holiday. In Japan, financial markets
are closed Monday and Tuesday for Golden Week holidays.

In mid-morning New York trades, the dollar had pared earlier losses after the
Institute for Supply Management said nonmanufacturing sectors of the U.S. economy
expanded during April after three months of contraction. The ISM’s services index
rose to 52.0% from 49.6% in March, well ahead of the decline to 49.4% anticipated
by economists.

But later in the day, the Federal Reserve released its senior loan officer
survey, which found consumers and businesses found it harder to borrow money in
the past three months, despite aggressive efforts by the Fed to ease money flows.

In U.S. stocks, the major indexes stumbled after Microsoft Corp. (MSFT) pulled
its offer for Yahoo Inc. (YHOO) and an analyst said Bank of America Corp. (BAC)
should walk away from its pending takeover of Countrywide Financial Corp (CFC).

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