Economy

Dollar strengthens despite Fed remarks
Source: CNN Money

BERLIN (AP) -- The dollar fell against major currencies Thursday following a report indicating the number of people out of work jumped last week.

The 15-nation euro rose against the dollar, trading at $1.5679 compared with $1.5664 in late New York trading. The British pound climbed to $1.9952 from $1.9885 overnight and the dollar slipped against the Japanese currency, to 102.35 yen from 103.09 yen.

Concerns about a possible U.S. recession have driven the dollar lower and this week Federal Reserve Chairman Ben Bernanke told Congress that the chances of an economic contraction was possible in the first half of the year.

On Thursday Bernanke told Congress that the Fed expects to recover most, if not all, of the $29 billion in loans to keep Bear Stearns Cos (BSC, Fortune 500). from declaring bankruptcy.

The Labor Department report released Thursday, however, did little to cheer investors.

The government reported that the number of people applying for unemployment benefits rose by 38,000 last week to 407,000 - the highest level since September 2005. The less volatile four-week average of claims also increased, by 15,750 to 374,500.

The dollar did get some support from the Institute for Supply Management. The ISM said Thursday the services sector contracted only slightly in March - a stronger performance than in February, and a better reading than many economists predicted.

In other late New York trading, the dollar fell to 1.0038 Swiss francs from 1.0172 Swiss francs, and inched down to 1.0097 Canadian dollars from 1.0099 Canadian dollars.

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