The dollar rose against the euro and the pound on Thursday after three major central banks in Europe cut interest rates to stimulate struggling economies.
The European Central Bank cut its key rate on Thursday by 50 basis points to 3.25 percent. The bank has already cut rate by 50 basis points on October 8 in a coordinated action by major central banks.
"In the case of the euro area, the latest survey data confirm that momentum in economic activity has weakened significantly, with sluggish domestic and external demand and tighter financing conditions," ECB president Jean-Claude Trichet said in a statement.
The Bank of England's Monetary Policy Committee voted on Thursday to reduce key rate by 1.5 percentage points to 3 percent. The wider-than-expected cut was the largest rate reduction from Britain since 1981. There has been a very marked deterioration in the outlook for economic activity at home and abroad, the Bank of England said.
The Swiss National Bank cut its key interest rate by half a percentage point to 2 percent. The bank said its move is intended to stimulate the economy amid the world's financial problems, and that higher interest rates were not needed because Swiss inflation is expected to decline.
Investors now turned to focus on the U.S. non-farm employment data to be released on Friday. Analysts said weak-than-expected payroll data might boost risk aversion trading further, sending the dollar higher.
The euro bought 1.2735 dollars in late New York trading compared with 1.2992 dollars it bought late Wednesday. The pound fell to 1.5753 dollars from 1.5960 dollars.
The dollar rose to 1.1762 Swiss francs from 1.1606 Swiss francs, and fell to 97.82 Japanese yen from 98.95 Japanese yen. It rose to1.1887 Canadian dollars from 1.1628 Canadian dollars.
Source: Xinhua
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