The dollar rose against the euro and advanced against the yen for the first time in six days as traders judged its losses were excessive given speculation the Federal Reserve will refrain from lowering interest rates.

The currency rebounded from a three-week low versus the yen as a technical chart traders use to predict price movements signaled the 2.4 percent decline in the past five days was overdone. Traders have stepped up purchases of options that profit from dollar appreciation against the euro and turned bullish in the futures market for the first time since December 2005. The South African rand rose versus the dollar, euro and yen.

``The Fed is going to keep rates on hold going forward,'' said Hans-Guenter Redeker, global head of currency strategy in London at BNP Paribas SA, France's biggest bank. ``Meanwhile all the recent negative economic surprises have come from outside the U.S. That's benefiting the dollar.''

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The U.S. currency climbed to 103.80 yen at 10 a.m. in London, from 102.87 in New York on May 9. It gained to $1.5434 per euro, from $1.5482. The euro traded at 160.23 yen, from 159.21 yen. The dollar will strengthen to $1.50 by Dec. 31, according to the median estimate of 40 strategists surveyed by Bloomberg.

The dollar's 14-day stochastic oscillator versus the yen was 8.1 on May 9 and 36.6 today, according to data compiled by Bloomberg. A level below 20 suggests the currency has fallen too fast. The chart measures the closing price of a security relative to its highs and lows during a particular period to try to predict whether it will rise or fall.

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