The dollar traded at 58.3300-3700 to the taka yesterday, lower than its previous closing at 58.3300-58.4000 on Thursday, dealers of leading commercial banks said.

"The dollar retained upside potential during at least the remainder of 2003 as US business cycle conditions continue to outperform those of other G7 countries, dealers of some leading commercial banks said.

Meanwhile, the euro rose to 1.1269 dollars on Friday against 1.1203 dollars late on Thursday in New York, but still a far from an all-time high point of 1.1933 dollars reached in late May.

The dollar also eased to 118.40 yen from 118.78 on Thursday, dealers said.

The dollar was being quoted in inter-bank trade at 1.3618 Swiss francs from 1.3698 Thursday and the pound eased to 1.5901 dollars from 1.5960 Thursday, dealers said.

The dollar shot to its highest level against the euro in two-and-a-half months on Tuesday after Greenspan gave the House of Representatives' financial services panel a generally upbeat assessment of the US economy.

Traders said the environment appears to favour the dollar, but that the greenback is digesting some recent gains.

Prospects of a US economic recovery appeared to brighten after a closely watched index from the Philadelphia Federal Reserve Bank showed Thursday a sharp improvement in activity in the US manufacturing sector in the Philadelphia region.

But some currency analysts said it was too soon to declare an end to the dollar's downturn. "The question everyone is asking is whether this is the end of the 18-month bear market for the dollar," they said.

"We believe it is too soon to call the turn, even though we have argued since the beginning of the year that the dollar would be stronger in both 2004 and 2005," they added.

Meanwhile, the money market remained packed with surplus liquidity yesterday due to thin credit flow and low investment, fund managers of leading commercial banks said.

The overnight money rate ranged between 3.50 per cent and 7.00 per cent -- slightly higher than Friday's range, they said.