Dollar falls as AIG losses spark new concerns on credit market

The dollar fell against most major currencies on Friday as losses from American International Group ( AIG) sparked new concerns on credit market and the health of the U. S. economy.

AIG reported it lost 7.81 billion dollars -- its second straight quarterly loss -- and revealed plans to raise 12.5 billion dollars in the coming months.

The world's largest insurer, like many of its peers in the financial services sector, has seen its investments in the credit markets plunge in value.

AIG's surprising large losses dimmed a growing sense of financial market optimism. On Thursday, U.S. Treasury Secretary Henry Paulson said he believed the credit crisis was "closer to the end than the beginning."

Rising crude oil prices remained a source of worry for investors. Light, sweet crude rose as high as 126.20 dollars on the New York Mercantile Exchange on Friday before settling at a record 125.96 dollars. For the week, oil jumped nearly 10 dollars.

The euro bought 1.5480 dollars in late New York trading compared with 1.5404 dollars it bought late Thursday. The British pound fell to 1.9519 dollars from 1.9535 dollars.

The dollar fell to 1.0410 Swiss francs from 1.0523 Swiss francs, and fell to 103.09 Japanese yen from 104.17 Japanese yen. It fell to 1.0067 Canadian dollars from 1.0176 Canadian dollars.