Little cheer for the US dollar (page 1 of 2)

Euro

The U.S dollar started the week trading in tight ranges against its major rivals despite an upgrade of Washington's alert level on the ivelihood of a terrorist attack on the U.S. soil.

The U.S. government raised its terror alert to "orange", the second-highest level, citing a high risk of militant attacks around the holiday season in the United States that could be bigger than the September 11 attacks of 2001.

Trading was thin and worries over the alert were somewhat offset by news that Libya had said it would scrap all of its weaponsof mass destruction. Midway through the week a holiday-thinned market brushed aside robust U.S. data and hesitated to react to news that mad cow disease had been discovered in the United States.

U.S. Agriculture Secretary Ann Veneman announced that the first case of the deadly mad cow disease, which devastated parts of the European agriculture industry in the 1990s, had been found in a Holstein cow in Washington State.

Geopolitical concerns overshadowed a series of upbeat U.S. data and survey results, including the ABC News/Money Magazine Consumer Comfort index, which climbed to a 17-month high of -9 last week from the previous week's reading of -11.

University of Michigan's consumer sentiment survey, a key gauge of consumer's views on the economy and their personal finances, came in at 92.6 in December, beating market expectations for 91. The final reading stood at 93.7 in November. U.S. thirdquarter gross domestic product came in at healthy annualised 8.2 percent, in line with
market expectations.

Comments from European officials, approving the rise in the euro, were also lending a helping hand to the euro. European Union Trade Chief Pascal Lamy said that the euro's current value was "not yet worrying" although it was essential that currencies did not move fast.

Santa's goodie bag failed to lift the greenback during the Christmas season as news that the Delta Air Lines terminal at News York's La Guardia Airport had been evacuated after a passenger breached security, increased worries over possible terror attacks during the holiday period.

The incident came just hours after the French government asked Air France to cancel Paris-Los Angeles flights after the U.S. intelligence identified a "credible" threat to the carrier.

The dollar was in no mood to celebrate Christmas as weak data out of the United States saw it hovering near fresh lows against the euro. U.S. durable goods orders fell 3.1 percent in November to a seasonally adjusted $180.07 billion, defying Wall Street economists' expectations of a 0.8 percent rise.

Orders tumbled on the heels of a revised 4 percent increase in October. Sales of new single-family homes fell 2.4 percent to a seasonally adjusted 1.082 million unit annual rate last month. Most forecasters had anticipated a rise in sales to 1.120 million.

Meanwhile, fallout from the mad cow scare continued, as Australia joined the list of countries, including Japan, South Korea, China and Mexico that have temporarily banned the import of U.S. beef. Canada has imposed a partial import ban on U.S. beef and cattle products.

On the economic scene, most of the next week's key data will fall on Tuesday, when reports on consumer confidence and business activity in the U.S. Midwest are released.

The National Association of Purchasing Management-Chicago's business barometer is expected to slip to 62.2 in December from 64.1 in November.