March 14 (Bloomberg) -- The dollar rose from a record low against the euro and traded above 100 yen as securities firms speculated central banks will collaborate to shore up the U.S. currency for the first time in 13 years.

Goldman Sachs Group Inc. and Morgan Stanley said coordinated action by policy makers to stem the currency's slide is increasingly likely. The gains limited the dollar's losses in a week when it fell to a 12-year low versus the yen, approached parity with the Swiss franc and traded above $2 per U.K. pound.

``The market is certainly on intervention watch,'' said Hans- Guenter Redeker, global head of currency strategy in London at BNP Paribas SA, France's largest bank. ``If I was in their shoes I would intervene in a concerted way that supported the dollar.''

The U.S. currency climbed to $1.5547 against the euro by 7:42 a.m. in New York, from $1.5635 yesterday. Earlier it fell to $1.5651, the weakest since the European currency's debut in 1999. The currency was at 100.62 yen, after dropping to 99.85 yen, from 100.65 yesterday.

The dollar was poised for a rebound, according to a gauge traders use to measure the momentum of currency moves. The currency's 14-day relative strength index is below 30 for a 13th straight day, indicating a dollar advance was overdue.

``Sentiment remains overwhelmingly dollar negative, though preliminary technical factors warn that a broader period of dollar consolidation may be at hand,'' Brown Brothers Harriman Inc. analysts led by Marc Chandler, global head of currency strategy in New York, said in a note to clients today.

Dollar Index

The Dollar Index traded on ICE Futures in New York, which compares the currency to those of six trading partners, was at 72.11 today, up from a record low earlier of 71.701.

The dollar has lost 47 percent of its value against the euro during its five-year slide as widening budget and trade deficits raised concern on the ability of the U.S. to attract foreign money.

The decline accelerated this year as the worst housing slump since 1991 forced the Federal Reserve to cut the benchmark interest rate 2.25 percentage points to keep the economy out of recession, lowering returns on dollar deposits. The dollar has weakened 12 percent against the euro and 14 percent versus the yen since the Fed started cutting rates in September.

Policy makers have stepped up their rhetoric to brake the dollar's slide. Japanese Finance Minister Fukushiro Nukaga said today abrupt currency moves are ``bad'' for economic growth and Economics Minister Hiroko Ota said excessive fluctuation is ``undesirable,'' though they reflect dollar weakness rather than yen strength. European Central Bank President Jean-Claude Trichet said March 10 the euro's surge still concerns him.

Bush, Bernanke

Treasury Secretary Henry Paulson said yesterday a strong dollar was in the national interest.

President George W. Bush will talk on the outlook for the U.S. economy to business and finance leaders in New York today. Fed Chairman Ben S. Bernanke speaks in Washington.

The Group of Seven, which next meets April 12-13 in Washington, may signal its intent to consider coordinated intervention, strategists at UBS AG, the world's second-biggest currency trader, wrote in a March 3 report.

The dollar traded at 1.0090 versus the Swiss franc, from 1.0093 yesterday, when it slid to a record of 1.0045. The U.S. currency rose 0.5 percent to $2.0240 per pound, after falling to the lowest level since December.

The dollar also advanced before a report economists forecast will show U.S. consumer prices probably increased in February as food and fuel expenses climbed.

Consumer Prices

The cost of living rose 0.3 percent last month following a 0.4 percent gain in January, according to the median forecast of 81 economists surveyed by Bloomberg News. A separate report may show consumer sentiment dropped to a 16-year low in March.

The yen climbed against all but two of the 16 most-active currencies as Asian stocks fell for a second week amid concern that widening credit-market losses will threaten bank earnings and trigger more fund failures.

Investors reduced purchases of higher-yielding assets, pushing the currency up the most against the South Korean Won, a favorite of the so-called carry trade. The yen rose 1.6 percent to 9.912 Korean won today.

``With stocks falling, traders are rushing into yen- buying,'' said Takeshi Tokita, vice president of foreign-exchange sales at Mizuho Corporate Bank in Tokyo, a unit of Japan's second-largest publicly traded lender by assets. ``There are some rumors hedge funds and banks will go into bankruptcy.''

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

Last Updated: March 14, 2008 07:54 EDT