The dollar rose against most major currencies on Wednesday ahead of widely expected rate cuts by the European Central Bank and the Bank of England.
The European Central Bank and the Bank of England will announce rate decisions on Thursday. Both central banks were expected to cut interest rates in efforts to counter the threat of recession and deflation.
The dollar was also helped as weak economic data boosted risk aversion in currency trading. U.S. private employers cut 250,000 jobs in November, according to a report released by Automatic Data Processing (ADP). It was the biggest job loss of private sector in seven years. Analysts said it signaled non-farm payroll data to be released by the Labor Department on Friday would drop sharply.
Non-manufacturing sectors of the U.S. economy has worsened to all time low, the Institute for Supply Management (ISM) reported on Wednesday. The ISM non-manufacturing index fell to 37.3 percent in November from 44.4 percent in October, a loss much larger than expected.
Overall economic activity in U.S. weakened across all Federal Reserve Districts, according to the latest Beige Book released by the Federal Reserve on Wednesday. The report noted that many sectors including consumer spending and manufacturing activity are slowing.
The euro bought 1.2655 dollars in late New York trading compared with 1.2697 dollars it bought late Tuesday. The pound fell to 1.4722 dollars from 1.4876 dollars.
The dollar rose to 1.2141 Swiss francs from 1.2072 Swiss francs, and fell to 93.09 Japanese yen from 93.22 Japanese yen. It rose to 1.2605 Canadian dollars from 1.2539 Canadian dollars.
(Xinhua News Agency December 4, 2008)
