Dollar Declines From Highest Level in Two Weeks Against Euro

By Kim-Mai Cutler

Oct. 1 (Bloomberg) -- The dollar fell from near a two-week high against the euro and was little changed versus the yen.

The U.S. currency weakened to $1.4154 per euro at 8:36 a.m. in London, from $1.4092 yesterday in New York. It surged 2.4 percent yesterday, the most since January 2001, and reached a high of $1.4009. The dollar was also at 106.27 yen from 106.11.

The U.S. currency jumped yesterday by the most in seven years after Senate leaders vowed to revive a bill to buy distressed assets from banks, legislation that was rejected two days ago by the House of Representatives.

``The dollar should remain supported within a range,'' said Katsunori Kitakura, chief treasury dealer in Tokyo at Chuo Mitsui Trust & Banking Co., Japan's seventh-largest publicly listed lender. ``A rescue package is likely to pass and a certain level of calm is returning to markets.''

The U.S. Senate has set a vote for tonight on legislation that would give Treasury Secretary Henry Paulson broad authority to buy troubled assets from financial companies. Senators plan to include a provision that would raise the limit on federal insurance for bank deposits to $250,000 from $100,000, a move demanded by some of the rescue plan's critics.

To contact the reporter on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net