Dollar boosted by Citi results but sentiment shaky

By Wanfeng Zhou

NEW YORK (Reuters) - The dollar rose on Friday, heading for its largest weekly gain versus the euro in a month, after a smaller-than-expected quarterly loss from Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) eased worries about the U.S. financial sector.

Citi's results added to positive earnings news this week from Wells Fargo & Co. (WFC.N: Quote, Profile, Research, Stock Buzz) and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz). That allowed the dollar to regain some strength after slumping to a record low against the euro on Tuesday.

"Citi earnings have encouraged the market to take on more risk and given (the dollar) a lift," said Stephen Malyon, senior currency strategist at Scotia Capital in Toronto.

They were "consistent with other bank earnings seen earlier this week, which has turned sentiment around on the dollar a little bit."

In late afternoon trading in New York, the dollar index, which tracks the greenback's performance against a basket of six major currencies, was up 0.2 percent at 72.191.

The euro slipped 0.1 percent to $1.5841, well off its record high of $1.6037 set on Tuesday. The dollar was up 0.7 percent against the yen at 106.94 yen.

The euro was capped by European Central Bank President Jean-Claude Trichet's comments published on Friday that euro-zone growth is likely to be weak in the second and third quarters before staging a recovery.

Risks to growth were on the downside, Trichet said in a joint interview with four European newspapers.  Continued...