Safe-have dollar builds on gains as SEC accuses Goldman Sachs of fraud

Safe-have dollar gains as SEC accuses Goldman

NEW YORK — The safe-haven dollar surged Friday as the U.S. government accused investment bank Goldman Sachs of civil fraud in its actions related to subprime mortgage investments.

“They’ve been the leading lights of the banking sector, which has been leading the stock market rally,” said Brian Dolan, chief currency strategist at Forex.com. The sell-off in stocks and commodities as investors cut back on risk is helping boost the dollar.

More “yuan chatter” about the Chinese government moving closer to allowing its currency to appreciate is also cutting down on traders desire for risk, Dolan said. A stronger yuan could mean a slowdown in China’s breakneck economic growth, which would hurt the global recovery.

In midday trading in New York Friday, the 16-nation euro dropped to $1.3505 from $1.3576 late Thursday. The euro jumped as high as $1.3691 this week in the aftermath of the release of bailout plan details. Greece could tap at least 30 billion euros in loans from other countries using the euro and the International Monetary Fund if it needed to do so.

But uncertainty over the effectiveness and scope of the plan is once again weighing on the euro. Greece has asked European Union and IMF officials to be in Athens for talks on Monday.

In other trading Friday, the British pound slid to $1.5409 from $1.5506 and the dollar dropped to 92 Japanese yen from 93.15 yen. The yen is also a safe-haven bid.

The dollar rose to 1.0610 Swiss francs from 1.0566 francs, and soared to 1.0134 Canadian dollars from 1.0022 Canadian dollars.