Safe Haven Dollar Gains After SEC Accuses Goldman of Fraud

The dollar surged Friday as investors pared their exposure to risk after federal regulators accused Goldman Sachs of fraud in the subprime mortgage market.

"They've been the leading lights of the banking sector, which has been leading the stock market rally," said Brian Dolan, chief currency strategist at Forex.com. The dollar benefited from the flight from risk as stocks and commodities traded sharply lower.

More speculation about the Chinese government moving closer to allowing its currency to appreciate is also cutting down on traders' appetite for risk, Dolan said. A stronger yuan could mean a slowdown in China's breakneck economic growth, which would hurt the global recovery.

In late New York trading Friday, the euro dropped to $1.3497 from $1.3576 late Thursday. The euro jumped as high as $1.3691 this week after details were released about Europe's plan to bail out Greece.

But uncertainty over the effectiveness and scope of the plan is once again weighing on the euro. Greece has asked European Union and IMF officials to be in Athens for talks on Monday.

In other trading Friday, the British pound slid to $1.5394 from $1.5506 and the dollar dropped to 92.13 Japanese yen from 93.15 yen. The yen is also a safe-haven bid.

The dollar rose to 1.0615 Swiss francs from 1.0566 francs, and soared to 1.0145 Canadian dollars from 1.0022 Canadian dollars.