The dollar declined for a third consecutive week against the euro, the longest losing streak in two months, as the U.S. housing slump and record crude oil prices slow growth in the world's largest economy.

``There's no turn in sight for the housing market,'' said Tom Fitzpatrick, global head of currency strategy at Citigroup Global Markets Inc. in New York. ``Higher oil prices effectively become a tax. It takes away the spending power from consumers, and it's a drag on growth.''
The dollar fell 1.2 percent this week to $1.5762 per euro yesterday, from $1.5577 on May 16. It touched $1.5814 on May 22, the weakest level since April 24. The U.S. currency fell 0.7 percent to 103.38 yen, compared with 104.04 a week earlier. The euro gained 0.5 percent to 162.95 yen, from 162.27.
The greenback declined against 13 of the 16 most-traded currencies this week, including 2.4 percent against the Swiss franc and 1.7 percent versus the New Zealand dollar, as oil touched a record $135.09 a barrel on May 22. The U.S. is the world's biggest importer of oil. Oil closed at $132 Friday.
The correlation coefficient between oil prices and the euro dollar exchange rate has been 0.95 for the past year, indicating they have moved in the same direction 95 percent of the time.
Sales of previously owned homes in the U.S. declined 1 percent to a 4.89 million annual rate in April, and were down 18 percent from a year earlier, the National Association of Realtors said yesterday. Reports next week will show new home sales dropped to a 17-year low, and consumer confidence, as measured by the New York-based Conference Board, was the weakest since 1993.
``If the economy disappoints, and oil prices remain high, then that's clearly a risk for the dollar,'' said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank in New York, in an interview on Bloomberg Television. ``It will delay even further the recovery of the greenback.''
The U.S. currency has lost 14 percent against the euro in the past 12 months as the Federal Reserve slashed its benchmark interest rate to 2 percent, from 5.25 percent in September. The European Central Bank has kept its target rate at 4 percent.
Minutes from the Fed's April meeting released this week indicated the bank probably won't lower borrowing costs further. Officials voiced concern inflation may accelerate, and most thought the cut to 2 percent last month was a ``close call,'' the minutes showed.
Futures on the Chicago Board of Trade indicated a 40 percent chance the Fed will increase the target rate for overnight lending between banks by a quarter-percentage point in December. There's a 92 percent chance policy makers will hold the rate at 2 percent at their next meeting on June 25.
The U.S. currency also dropped versus the yen and fell to a 25-year low against the Australian dollar. The Chinese yuan posted its biggest weekly increase this year on signs the country's officials are accelerating the currency's gains to curb rising prices.

Crude oil rose to a new record last week as the dollar fell against the euro, prompting investors to buy commodities as a hedge against the currency's decline. The weakening dollar and higher global demand for raw materials have led to records this year for commodities including gold, corn, soybeans and rice.
Crude-oil prices touched a record Thursday, spurred by concern supplies may not be adequate. The International Energy Agency said it may cut long-term forecasts as fields deplete faster than expected. The price decline at the end of the day occurred as some traders said this month's 17% rally wasn't justified by U.S. stockpiles and demand.
Banks have increased their price forecasts because of supply constraints and demand growth. OPEC ministers said the group is powerless to stop the surge in prices. Members of the Organization of Petroleum Exporting Countries, excluding Angola and Ecuador, exported 22.762 million barrels a day on tankers in the four weeks ended May 4. That compares with 23.786 million barrels a day in the equivalent period to April 6, data.

Crude oil for July delivery rose to $132.19 a barrel. The contract rose 4.9% last week. Futures reached $135.09 Thursday, the highest since trading began in 1983. Prices have doubled over the past year. Brent crude oil for July settlement rose to $131.57 a barrel. The contract touched a record $135.14 Thursday. Crude oil may rise next week, a Bloomberg News survey showed. This is the first time in 20 weeks that analysts forecast an increase in prices. There will be no floor trading in New York on May 26 because of the Memorial Day holiday.

Gold rose, capping the third straight weekly gain, as surging energy costs boosted demand for a hedge against inflation. Gold has gained 40% in the past 12 months as oil doubled. The metal reached a record $1,033.90 an ounce on March 17. Gold futures for June delivery rose to $925.80 an ounce. The metal gained 2.9% last week after climbing 4.9% in the previous two weeks. Silver futures for July delivery climbed to $18.29 an ounce. The price gained 7.8% for the week, the most since late February. This year, silver has advanced 23%, while gold climbed 10%.

Copper prices fell last week. Copper for three months delivery closed at $8,180 per tonne. Earlier it touched $8,040 a tonne, its lowest in two months. Aluminium held firm on the back of historically high energy prices, despite bearish near term fundamentals -- namely plentiful stocks of the metal used in packaging, transportation and power. Aluminium ended at $3,002 a tonne. Nickel closed at $24,100 a tonne.

U.S. stocks cosed week lower, extending the market's biggest weekly retreat since February, on concern a worsening housing recession and rising energy costs will prolong the slump in corporate profits.The Standard & Poor's 500 Index slid 1.3%. The Dow Jones Industrial Average lost 1.2%. The Nasdaq Composite Index sank 0.8%. Five stocks dropped for each that rose on the New York Stock Exchange.

Ford Motor Co. declined for a sixth day after the second- biggest U.S. automaker said consumers are buying fewer trucks as fuel prices climb. Nordstrom Inc. led retailers to a six-week low as crude rose. Homebuilders posted their biggest weekly tumble since 2001 after a report showing sales of previously owned homes matched an all-time low in April. Goldman Sachs Group Inc. dropped for a ninth day, the longest losing streak since the company went public in 1999, on concern brokerage earnings will be hurt by further writedowns on mortgage-related assets.
General Motors Corp. fell the most in the Dow average, tumbling 4.5 percent to $17.60 after pledging $215 million, $15 million more than its initial estimate, to help end a 12-week strike at a supplier that reduced production at the largest U.S. automaker by 230,000 cars and trucks this quarter. The shares lost 15 percent in the week.
D.R. Horton Inc. led homebuilders in S&P indexes to a sixth- straight decline after the National Association of Realtors said sales of existing homes declined 1 percent to an annual rate of 4.89 million from 4.94 million in March. The median price dropped 8 percent from April last year, the second-biggest decline ever, as the number of houses on the market surged. D.R. Horton retreated 3.1 percent to $12.98. The S&P Supercomposite Homebuilding Index slumped almost 16 percent in the week. Apple Inc. advanced 2.3 percent to $181.17. Merrill Lynch & Co. raised its share-price estimate for the maker of the iPod media player by 16 percent to $215, citing a ``significant increase'' in sales generated by the iPhone.

Thus far we haven't seen the consumer collapse, yet the concerns and strains of rising oil prices took on a new dimension for the market this week when AMR Corp. (AMR) announced it would be cutting 11-12% of its capacity and instituting a $15 fee for the first checked bag on its flights in an effort to combat rising oil prices. Additionally, Ford (F) announced a cutback in production of its full-size SUVs and trucks in North America citing customers' shift in demand for more fuel efficient vehicles.

Cautious outlooks from home improvement retailers Lowe's (LOW) and Home Depot (HD) didn't help matters either.