NEW YORK – The dollar rose against major currencies Thursday as markets grapple with worries that tight lending will throw the global economy into a recession.

The 15-nation euro fell to $1.3661 in late New York trading from $1.3680 it bought late Wednesday. The British pound slid to $1.7197 from $1.7292, while the dollar advanced to 100.48 Japanese yen from 100.31 yen.

Wall Street had begun the day higher on news that the Bush administration is considering taking part ownership in a number of U.S. banks. But the Dow Jones industrials plummeted more than 675 points to end below 9,000, its lowest level in five years, on a wave of fear about the world economy.

The Fed and other leading central banks this week lowered key interest rates to help unclog the credit markets and promote lending to help the global economy. Cutting interest rates can stimulate economic growth and help restore confidence to markets, but doing so may undermine a currency as investors look for better returns elsewhere. The U.S. rate is now the second-lowest among the majors, higher only than Japan.

“The dollar continues to benefit from safe haven flows and the continuing deterioration in Europe,” said Michael Woolfolk, senior currency strategist at Bank of New York Mellon Corp. “Meanwhile, in emerging markets, it has been a bloodbath. The Brazilian real, the Mexican peso and the Australian dollar have all been hit very hard.”

The dollar hit its highest level against the Mexican peso Wednesday, surging to more than 14 pesos before retreating to 12.1905 pesos in late trading. The dollar bought 12.5615 pesos late Thursday.

High interest rates previously offered in Australia and New Zealand have attracted American investors, who borrow money at cheap interest rates at home and take advantage of higher rates overseas. Those investors are now selling their foreign positions and buying the dollar back up.

In other trading, the dollar jumped to 1.1439 Canadian dollars from 1.1245 Canadian dollars, and climbed to 1.1296 Swiss francs from 1.1259 Swiss francs as investors see Switzerland’s proximity to Europe a risk.

“The view is that they will not be able to avoid some type of fallout from Europe,” Woolfolk said. “The franc has orbited around the euro for years now but is undermined by the euro’s weakness. It’s been kicked out of the favorite currency club.”