Dollar rises after reports on hiring, growth

AP News
Posted: Oct 05, 2011 3:48 PM
Dollar rises after reports on hiring, growth

The dollar rose against the euro Wednesday after a pair of reports suggested the U.S. economy is growing, although slowly. Troubling signals from Europe also hurt the euro.

The euro fell to $1.3351 late Wednesday from $1.3369 early Wednesday morning. It had risen from $1.3246 late Tuesday.

A trade group's survey of the service sector found that those companies expanded their business in September, but at a slightly slower pace than in August. New orders and order backlogs increased, indicating that growth might pick back up, the Institute for Supply Management said.

A separate report from payroll processor ADP found that private companies added 91,000 jobs in September. That was a slight gain from August, but does not necessarily predict how the government's official jobs report for September will turn out on Friday.

Europe's debt problems, meanwhile, continued to cause concern among currency traders.

Greek civil servants took to the streets, paralyzing the government and transportation systems to protest budget cuts. Moody's lowered Italy's credit rating late Tuesday. Franco-Belgian bank Dexia SA appeared close to receiving a massive bailout because other banks will not lend to it. They fear exposure to debt Dexia holds from Greece and other struggling European countries.

Those developments helped make the euro less attractive relative to the dollar. Traders fear that the crisis will cause a recession in Europe, hurting other investments that are traded in euros.

In other trading, the dollar fell to 1.0432 Canadian dollar from 1.0641 late Tuesday. The Canadian dollar is tied closely to oil prices, which rose 5 percent from a 12-month low Wednesday as traders grew slightly more optimistic about the U.S. economy's outlook.

The dollar fell against other major currencies. The British pound rose to $1.5467 from $1.5385 late Tuesday. The dollar fell to 76.72 Japanese yen from 76.96. It slipped to 0.9240 Swiss franc from 0.9242.