Dollar mixed in thin year-end trading

AP News
Posted: Dec 31, 2009 3:57 PM

The dollar was mixed in light trading Thursday, as market volumes dried up on the last day of the year.

The 16-nation euro slipped to $1.4321 in late New York trading from $1.4334 late Wednesday, while the pound rose to $1.6169 from $1.6069. The dollar edged up to 93.07 Japanese yen from 92.46 yen.

There have been big fluctuations over the year in the currency markets, but the dollar is ending the year close to where it started against the euro, the pound and the yen.

The prevailing trend during much of the year was related to risk appetite _ when investors were extremely downbeat as at the start of the year, the dollar was in demand given its widely viewed status as a safe haven currency, but when optimism returned they looked for potential rewards elsewhere and the U.S. currency fell sharply.

However, the dollar has enjoyed a year-end rally as investors believe the U.S. Federal Reserve will start raising interest rates from their current record lows sooner than many of its peers, meaning that a dollar would yield more.

In economic news Thursday, the Labor Department said new claims for unemployment benefits fell to the lowest level since July 2008.

In other late trading, the dollar fell to 1.0473 Canadian dollars from 1.0554 late Wednesday, and was slightly lower at 1.0356 Swiss francs compared with 1.0370 francs.