Dollar Declines on Concern Interest-Rate Advantage Has Peaked

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Sept. 4 (Bloomberg) -- The dollar declined for a second day against the euro on speculation the gap between interest rates in the U.S. and those in the euro region won't widen this year. The difference between U.S. and German two-year government bond yields narrowed to the smallest in almost 17 months before a Federal Reserve report on Sept. 6 that may indicate slowing consumer spending and a sagging housing market. The yen gained the most in five weeks after a government report showed Japanese capital spending accelerated in the second quarter. ``With the rate differential peaking, it removes a big support for the U.S. dollar,'' said Harvinder Kalirai, head of research in Sydney at State Street Corp., which serves as a custodian for $10.7 trillion of assets. ``The yield advantage of the dollar is expected to decline.'' Click here to read the rest of the article.