Dollar weakens on mixed economic data

AP News
Posted: May 19, 2011 3:32 PM
Dollar weakens on mixed economic data

The dollar weakened against other major currencies Thursday as a group of economic reports sent mixed signals to investors.

The Labor Department's weekly jobs report suggested that the U.S. labor market is slowly healing, but a forecasting measure from the Conference Board declined for the first time since June 2010, and a regional manufacturing survey slid.

The euro rose to $1.4311 late Thursday from $1.4226 Wednesday. The British pound gained to $1.6214 from $1.6142.

The Labor Department said the number of people filing initial claims for unemployment benefits dropped 29,000 last week to a seasonally adjusted 409,000.

The Federal Reserve is keeping the key U.S. interest rate near zero because so many people are out of work. Other central banks are raising rates to counter the surge in oil and food prices. Higher rates tend to support demand for a currency, and the dollar's value has slumped this year. Hopes that the Fed will soon start lifting rates would support the dollar, but market watchers generally don't expect the Fed to act until next year.

Meanwhile, the Conference Board said Thursday its index of leading economic indicators dropped 0.3 percent in April, signaling bumps ahead for economic growth this summer.

"The data today highlights that there is some trouble in the U.S.," said Brian Dolan, chief currency strategist of

In other trading Thursday, the dollar rose slightly to 0.8815 Swiss franc from 0.8814 Swiss franc but fell to 96.93 Canadian cents from 97.25 Canadian cents. Meanwhile, the dollar was flat against the Japanese yen at 81.77.