USD weaker versus euro

The US dollar was weaker versus the euro in late-morning trade in New York after gaining on the shared currency earlier after reports that France and Italy both saw industrial production slow in May.

Declines came for the greenback on worries about more losses in the financial sector after mixed signals about the solvency of mortgage lenders Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) when the US Treasury secretary said in Congressional testimony that both lenders have enough capital but the president of the St. Louis Federal Reserve hinted that the two lenders could need a government bailout.

The dollar traded at $1.5782 to the euro while the yen weakened versus the greenback to ¥107.0050 to the dollar just before noon in New York.

The pound weakened in relation to the dollar and the euro after the Bank of England held interest rates steady again at 5 percent, with the cost to buy a pound at $1.9774 in late-morning trade in New York while at the same time the pound traded at 79.81 to the euro.

Elsewhere, the South African rand was stronger on continued enthusiasm over merger talks involving the telecommunications sector there and even though manufacturing growth there slowed in May.

The rand most recently traded at R7.7205 to the US dollar.

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