WASHINGTON (Reuters) –
U.S. consumer spending fell in April from March, despite personal income posting the largest increase in 11 months, a government report said on Monday, showing activity in the second quarter getting off to a slow start.

The Commerce Department said spending slipped 0.1 percent after a revised 0.3 percent fall in March. That was slightly better than market expectations for a 0.2 percent fall in spending.

U.S. stock index futures extended gains after data, while U.S. Treasury debt prices were steady at lower levels. The U.S. dollar pared losses versus the euro and yen.

A government report on Friday showed consumer spending, which accounts for over 70 percent of economic activity, rose at a 1.5 percent annual rate in the first quarter, but slower than the 2.2 percent increase the Commerce Department had previously estimated. Consumption plunged in the second half of last year.

Personal income rose 0.5 percent, the biggest increase since May last year, after falling by a revised 0.2 percent in March. Analysts polled by Reuters had forecast income to fall 0.2 percent in April.

Disposable income surged 1.1 percent in April, boosted by tax cuts and increased social benefit payments under the government's record $787 billion stimulus package, the Commerce Department said. Excluding the stimulus package, disposable income increased 0.7 percent in April.

"The income data was skewed by the stimulus, where unemployment insurance was accelerated and extended. If you take that out it doesn't look as good as it seems," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

Savings jumped to a record annual rate of $620.2 billion. The savings rate rose to 5.7 percent in April, the highest level since February 1995, from 4.5 percent the previous month.

Households, buffeted by job losses and falling asset values, are cutting spending on nonessential items, preferring to save any extra income.

Inflation nudged up in April, with the personal consumption expenditures price index, excluding food and energy, at 1.9 percent on a year-over-year basis from 1.8 percent in March.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

LONDON (AFP) –
The euro jumped above 1.42 dollars for the first time this year, as rebounding global stock markets persuaded investors to switch away from the safe-haven US currency, dealers said.

In London trading, the European single currency surged to 1.4246 dollars -- the highest point since December 29. It later pulled back to 1.4230 dollars, up from 1.4153 dollars in New York late on Friday.

Against the Japanese currency, the dollar fell to 94.54 yen from 95.29 yen late Friday.

"The dollar remains on the defensive despite the announcement over the weekend that GM will file for bankruptcy today," economist Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ said in London.

"The key market driving dynamic remains improving global investor confidence in anticipation of a recovery in the global economy coupled with improving financial market conditions."

The euro, which is widely regarded as a higher-risk currency than the dollar, tends to strengthen when investor confidence and risk appetite improve owing to signs of growing economic stability.

Meanwhile General Motors will declare bankruptcy on Monday, ending an era in US manufacturing and setting a path for the government to take a majority stake in what was once the world's biggest corporation.

Senior US officials detailed on Sunday what they hope will be a swift process in which GM should be able to reemerge from bankruptcy protection as a new, leaner company within 60 to 90 days.

In foreign exchange trading on Monday, the dollar fell on easing risk aversion as "global growth expectations are stabilising and the financial crisis appears to be through its worst," Standard Chartered analysts wrote in a note.

But investors remained cautious ahead of a US non-farm payrolls report out later this week. They are looking for clues on possibilities for recovery amid persistent worries over America's ballooning budget deficit.

The euro was softer before a meeting on Thursday of European Central Bank (ECB) officials who are expected to keep the overnight lending rate steady at one percent.

Players are waiting on the bank's details of a plan to buy bonds to shore up credit in major European markets, SMBC chief strategist Daisuke Uno said.

The ECB has already said it will buy 85 billion dollars' (60.28 euros') worth of covered, or collateralised, bonds, a move which should help boost cash flows in French, German and Spanish markets where such instruments are traded most widely.

The purchase programme is intended to help banks raise funds so that they can then extend credit to households and firms.

On Thursday, the ECB will also release its latest staff forecasts for growth and inflation in the 16-nation bloc. A downward revision is likely for growth, owing to a disastrous first quarter in its leading economies.

The Bank of England is to meet on the same day and is expected to keep its record low interest rates unchanged at 0.5 percent. Ahead of the decision, sterling was extending its recent strong run against the dollar.

In trading here on Monday, the euro was changing hands at 1.4230 dollars against 1.4153 dollars late on Friday, at 134.58 yen (134.94), 0.8679 pounds (0.8737) and 1.5118 Swiss francs (1.5104).

The dollar stood at 94.54 yen (95.29) and 1.0626 Swiss francs (1.0663).

The pound was at 1.6394 dollars (1.6182).

On the London Bullion Market, the price of gold jumped to 987.28 dollars an ounce from 975 dollars an ounce late on Friday.

LONDON (AFP) –
The euro jumped on Monday above 1.42 dollars for the first time this year, as rebounding global stock markets persuaded investors to switch away from the safe-haven US currency, dealers said.

In morning trading here, the European single currency hit 1.4246 dollars, which was the highest level since December 29, 2008.

"The dollar remains on the defensive despite the announcement over the weekend that GM will file for bankruptcy today," said economist Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ in London.

He added: "The key market driving dynamic remains improving global investor confidence in anticipation of a recovery in the global economy coupled with improving financial market conditions."

The euro, which is widely regarded as a higher-risk currency than the dollar, tends to strengthen when investor confidence and risk appetite improve owing to signs of growing economic stability.