Recovery hope lifts dollar

08:36, June 04, 2010      

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The optimism of U.S. recovery, with persisting worries about the European economy, pushed the dollar higher against most of the major currencies on Thursday.

The euro slipped back to the four-year low of 1.2112 dollars it touched earlier this week. Worries about the sovereign debt crisis in the euro zone and its impact on the banks in the area still weigh on the market.

The 16-nation currency, seen as a sign of confidence that investors have in Europe's ability to deal with the debt crisis, has dropped about 15 percent against the green back so far this year.

The euro dropped to 1.2182 dollars in late New York trading from 1.2238 dollars late Wednesday, and the British pound fell to 1.4633 dollars from 1.4648 dollars.

A series of mixed economic reports lifted some investors' confidence in U.S. economic recovery.

The Institute for Supply Management said that its service index was unchanged at 55.4 in May, the same level as April and March. The continuous expansion in service sector is a good sign that the economy will add more jobs since it accounts for 80 percent of all workers outside of farmers.

A report from the Labor Department showed that the number of people filing for jobless benefits fell for the second straight week, adding to hopes that the jobs market is slowly improving. Initial claims dropped 10,000 last week to a seasonally adjusted 453,000, basically in line with market expectation.

Meanwhile, payroll company ADP said private employers added 55, 000 jobs in May, lower than the 60,000 forecast by economists. However, ADP revised its April data to 65000, more than double the previous estimate, offsetting the worse-than-expected May figure.

These data came a day before the May pay-roll report, which is expected to show the economy added 513,000 jobs, the most in 26 years.

The potentially strong economic reports lifted investors' expectations that the Federal Reserve may consider to increase key interest rates, which is a boost to the green back.

In other trading, the dollar rose to 92.68 Japanese yen from 92. 18 yen, slipped to 1.1549 Swiss francs from 1.1558 francs, but climbed to 1.0418 Canadian dollars from 1.0396 Canadian dollars late Wednesday.

Source:Xinhua

(Editor:黄蓓蓓)

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