Dec. 9 (Bloomberg) -- The dollar rose against the euro and the yen after Market News cited a French Treasury official as saying he doesn't want central banks to increase the pace at which they are accumulating euros.

``It underlines the concern that policy makers have on the speed of the euro's appreciation,'' said Adam Cole, a currency strategist at RBC Capital Markets in London. ``They don't want the euro's appreciation being seen as a one way bet.''

Against the euro, the dollar rose to $1.3317 at 10:11 a.m. in London, from $1.3337 yesterday in New York, according to electronic currency-dealing system EBS. It also gained to 104.16 yen, from 103.97.

The share of dollars in total reserve holdings was 63.8 percent at the end of 2003 from 63.5 percent in 2002 and down from 66.9 percent in 2001, the International Monetary Fund said in its annual report in April 2004. The euro proportion rose to 19.7 percent from 19.3 percent in 2002 and 16.7 percent in 2001.

Dollar deposits from members of the Organization of Petroleum Exporting Countries fell to 61.5 percent in the second quarter, the Bank for International Settlements said on Dec. 6. The proportion of deposits denominated in euros increased to 20 percent at the end of June from 12 percent in July-to-September 2001, the BIS said in its quarterly review of financial markets.

Concern that central banks may diversify their foreign- exchange holdings away from the dollar has been a factor in the U.S. currency's slide this quarter, said Michael Klawitter, a currency strategist at WestLB AG in Dusseldorf, Germany. The dollar has dropped 6.5 percent against the euro and 5.3 percent versus the yen since the quarter began.

`Dollar Recovery'

``Clearly the dollar is in a recovery move'' now against the euro, Klawitter said. ``There's no doubt about this -- to see a straight upward move of such magnitude for so many weeks is very rare in financial markets.'' The euro has gained for eight straight weeks against the dollar. The yen has risen for 10 consecutive weeks versus the U.S. currency.

The dollar has lost as much as 0.8 percent against the euro and 1.4 versus the yen after Federal Reserve Chairman Alan Greenspan told the European Banking Congress in Frankfurt on Nov. 19 that foreign investors will tire of financing the record U.S. current account and will channel money into other currencies.

To contact the reporter on this story: Steve Rothwell at srothwell@bloomberg.net

Last Updated: December 9, 2004 05:14 EST