By Fabio Alves OF DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The euro held on to its overnight gains on the dollar in early New York trading Wednesday as revived demand for riskier assets fueled a rally in oil, gold, copper and other commodities. The rebound in the single currency began in Asian and European trading when crude oil rose above $80 a barrel and gold hit a fresh record high, lending support to other riskier assets, including equities. The euro's advance lost steam when U.S. stocks futures reversed direction and went into red after the disappointing U.S. housing data. Early in New York, the euro was at $1.4943 from $1.4869 late Tuesday, according to EBS via CQG. The dollar was at Y89.19 from Y89.30, while the euro was at Y133.26 from Y132.84. The U.K. pound was at $1.6807 from $1.6813. The dollar was at CHF1.0111 from CHF1.0165. The Dollar Index, which tracks the greenback against a trade-weighted basket of six currencies, was at 75.046 from 75.301. "In the absence of anything really majorly market-moving, investors are going to continue to just trade the ranges up and down," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington. "We saw the dollar rise [Tuesday] and risk appetite was off, and now we're just seeing a bit of profit taking on the previous day's move." Despite the more upbeat mood for higher-yielding currencies, the euro has failed to rise past the key psychological level of $1.50 and remains confined to recent ranges. The release of two U.S. economic reports didn't have a large effect on currency markets, though it dented the prospects for U.S. stocks, which are now expected to open slightly lower. The euro pared some intraday gains in response. U.S. Housing starts unexpectedly fell in October, while consumer price index rose more than forecast, though it slowed for an eight consecutive month in annual terms. The economic data reinforced the view that the Federal Reserve will keep key interest rates at ultra-low levels for an extended period to pull the U.S. economy from its worst recession since World War II, which erodes demand for the low-yielding dollar, as investors chase higher returns abroad. The U.K. pound struggled amid choppy trading on the back of the minutes from the Bank of England's November monetary policy committee meeting. The sterling hit a low of $1.6771 overnight, before bouncing back. The committee was split three ways on whether to increase quantitative easing by GBP25 billion and also discussed reducing the remuneration rate on a proportion of commercial bank reserves. "The market has so far read the November BoE minutes as dovish," Credit Suisse analysts wrote in a research note today. "The surprise statement that the BoE considered the possibility of cutting the interest rate paid to banks on a portion of their reserves is the key driver of the market's response." Canada Morning The Canadian dollar is modestly higher early Wednesday in line with stronger commodity prices and the broad-based pressure weighing on the U.S. dollar. Record-high gold prices and the recent resurgence in oil prices are seen as continuing to lend support to the Canadian currency, though it needs to surmount more decisively some near-term technical barriers to break free of the recent erratic and choppy trade around the C$1.0500 region. Currency strategist Camilla Sutton of Scotia Capital in Toronto said that "the drivers of U.S. dollar-Canada continue to favor a move lower" however, citing the commodity price surge, global weakness for the greenback, and indications over the last month of increased global demand for raw materials. Accordingly, Scotia expects "that once the U.S. dollar-Canada pair does break away from C$1.0500 it will be to the downside." Early Wednesday, the U.S. dollar was at C$1.0476 from C$1.0509 late Tuesday. -By Fabio Alves, Dow Jones Newswires; 212-416-2204;

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