AP, FRANKFURT, Germany -- The dollar continued its rise against the euro Friday amid hopeful signals on the U.S. economy, falling oil prices and gloom about the European economic outlook.

The 15-nation euro traded as low as $1.4679 in afternoon European trading -- well short of the $1.4885 it bought in New York late Thursday.

The British pound fell as low as $1.8510 before rallying by the afternoon to $1.8586 -- still below Thursday's level of $1.8716. The dollar rose to 110.48 Japanese yen from 109.54 yen.

U.S. data released Friday showed industrial output rose in July at a slightly better pace than expected as a rebound in the auto industry offset a big plunge in output at the nation's utilities.

The euro's continued decline came ''amid speculation that U.S. consumer confidence is rising and consumer spending will keep the economy out of recession,'' said Randall Lacayo, an analyst at Wachovia. He also identified a strong decline in crude oil prices as a factor.

The euro fell below $1.50 last week for the first time in six months after the European Central Bank dashed expectations that it might continue raising interest rates amid fears of a European slowdown.

Those fears were underlined Thursday by news that the euro zone economy contracted by 0.2 percent in the second quarter -- with Germany, France and Italy all posting declines.

The euro is well off its all-time high of $1.6038, set exactly a month ago.

The pound is suffering from similar fears that the British economy is heading for a recession.

Meanwhile, data this week showed U.S. inflation running at its fastest pace in 17 years -- raising the possibility that inflation could force the Federal Reserve to start raising interest rates even as its European peers hold tight or mull cuts.

Higher interest rates can prop up a currency, as investors earn higher returns on their investments, while cutting interest rates often sends currencies lower.

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