THE US dollar rose last month, reaching the highest since February against the yen, as economic reports signaling the United States economy may avoid a recession led traders to bet the Federal Reserve will raise interest rates this year.

The US currency gained a second straight month versus the yen and euro as the government said growth was faster last quarter than initially estimated while a measure of durable goods orders unexpectedly rose. At the same time, evidence mounted that Europe's economy was slowing. Brazil's real was the biggest gainer last month among the 16 most-traded currencies, Bloomberg News said.

''The US might be coming out of the slowdown when the rest of the major economies start to cool," said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. "That added fuel to the dollar's rebound."

The US dollar climbed 1.5 percent last month to 105.52 yen, from 103.91 on April 30. It reached 105.87 last Thursday, the highest since February 28. The greenback advanced 0.4 percent to US$1.5554 per euro, from US$1.5622 on April 30. The euro rose 1.1 percent to 164.15 yen, from 162.36 yen at the end of April.

Brazil's real was the biggest gainer last month among the 16 most-traded currencies versus the US dollar, rising 2.2 percent to 1.627 per dollar. Fitch last Thursday raised Brazil's credit rating to investment grade, matching a move by Standard & Poor's on April 30. South Korea's won, with a 2.5 percent drop, was the weakest major currency last month.

The dollar's biggest gain last week came on Thursday as the Department of Commerce said the economy grew at a 0.9 percent annual pace last quarter, faster than its April 30 estimate of 0.6 percent. The government also said last week that durable goods orders excluding transport equipment rose 2.5 percent in April.

"The data has been dollar-positive because they'll allow the Fed to keep rates where they are," said Greg Anderson, a foreign exchange strategist at ABN Amro Bank NV in Chicago. "They show the opposite of stagflation."

The National Association of Purchasing Management-Chicago said last Friday its business index rose to 49.1 last month, higher than forecast, from 48.3 in April. Figures below 50 signal contraction.

Euro loses

Futures speculators flipped to betting on euro losses in the past week. Speculators including hedge funds held a net 3,390 contracts wagering on euro losses versus the US dollar, against a net 6,841 contracts betting on euro gains a week earlier, the Commodity Futures Trading Commission in Washington said last Friday.

The euro briefly fell last Friday after retail sales in Germany, Europe's largest economy, unexpectedly dropped for a second consecutive month in April as faster inflation left consumers with less money.

Sales adjusted for inflation and seasonal swings fell 1.7 percent from March, when they dropped 2.2 percent, the Federal Statistics Office in Wiesbaden said. Economists in a Bloomberg News survey forecast a gain of 0.6 percent.