Dollar gains on fears about slowing global economy

By The Associated Press
The dollar rose Monday as signs of a slowdown in U.S. manufacturing compounded worries about a weakening global economy.
Bad economic news out of Europe and Asia - and even the U.S. - can give a boost to the dollar. Traders consider the dollar a safe haven asset, so it tends to rise when investors are worried about the economy.
On Monday, that meant a resumption of losses in the euro. The euro rose last week after the leaders of the 17 eurozone countries agreed to allow direct bailouts of teetering banks and to ease new austerity measures on the most stricken countries.
But it slipped back to $1.2584 in late trading Monday from $1.2660 late Friday. The euro has declined about 13 percent against the dollar over the past year.
The dollar also ticked higher against the British pound, rising to $1.5692 from $1.5683. But it fell to 79.49 Japanese yen from 79.85 yen.
A closely watched survey showed that U.S. manufacturing contracted last month for the first time in almost three years. U.S. manufacturing has helped drive growth since the recession ended. But more recently, U.S. employers have become more cautious about hiring because of the long-running financial crisis in Europe and slowing manufacturing in production powerhouse China.
Economic news from Europe indicated the crisis there is far from over. Unemployment in the 17 countries that use the euro hitting a record in May at 11.1 percent. The region-wide numbers on jobs go back to the creation of the euro in 1999.
The dollar barely budged against other major currencies Monday, slipping to 1.0167 Canadian dollars from 1.0174 and edging up to 0.9545 Swiss franc from 0.9490 Swiss franc.
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