dollar falls

The dollar fell against the euro for the first day in three and dropped against the yen after a government report showed the U.S. current-account deficit grew more than forecast in the fourth quarter.

The gap was a record $187.9 billion, from a revised $165.9 billion in the third quarter, the Commerce Department said.

The pace of deficit growth means the U.S. needs to attract more than $2 billion daily to compensate for the gap and to maintain the dollar's value against other currencies.

Yesterday the dollar advanced to the highest in a week against the euro after a government report showed demand among international investors for U.S. assets rose in January to the most in almost two years. The biggest increase was in purchases of U.S. Treasury securities, mostly by buyers in the Caribbean, which analysts tie to hedge funds, while Japan's holdings of Treasuries fell by the most since 2000.

Europe's currency is being buoyed by speculation growth will quicken from 0.2 percent last quarter. Investor confidence in Germany, Europe's largest economy, unexpectedly increased to a six-month high in March and money supply growth in the euro area grew an annual 6.6 percent in January, the fastest pace in more than a year.

Business