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Dollar mixed on disheartening US economic reports

 A photograph of the Nortel office tower on Monday, Nov. 10, 2008 in Etobicoke, Ont. Nortel reported a third-quarter net loss of US $3.42 billion. Can...
 A news reporter walks past the Nortel office tower sign on Monday, Nov. 10, 2008 in Etobicoke, Ont. Canadian telecommunications equipment maker Norte...

Earns Nortel

A photograph of the Nortel office tower on Monday, Nov. 10, 2008 in Etobicoke, Ont. Nortel reported a third-quarter net loss of US $3.42 billion. Can...

Earns Nortel

A news reporter walks past the Nortel office tower sign on Monday, Nov. 10, 2008 in Etobicoke, Ont. Canadian telecommunications equipment maker Norte...

The dollar was mixed Wednesday after the U.S. government said retail sales plunged far more than expected and the Federal Reserve's "Beige Book" gave a dour snapshot of the economy. On Thursday, the European Central Bank meets to set interest rates. It is expected to cut rates.
The 16-nation euro dipped to $1.3159 in late trading in New York from $1.3177 late Tuesday. Meanwhile, the British pound climbed to $1.4587 from $1.4493 late Tuesday. The dollar was unchanged at 89.13 Japanese yen.
The Federal Reserve look at business conditions in the new year, released Wednesday, showed nervous retailers and manufacturers looking at cuts in capital spending. The service sector also reported declines in many of the reporting regions.
Earlier on Wednesday, the Commerce Department reported that retail sales dropped 2.7 percent last month, more than double the 1.2 percent decline that Wall Street expected.
The weakness in consumer spending has been a prime contributing factor to the economy's current swoon and analysts say they don't see that turning around soon. They predict the current recession, already the longest in a quarter-century, will continue at least until the second half of this year.
On Wednesday, two retailers, department store Gottschalks Inc. and discount chain Goody's Family Clothing, filed for bankruptcy protection. Additionally, Nortel Networks Corp. became the first big technology company to file for bankruptcy protection in North America.
The euro had been trading higher, but dropped back after Germany, Europe's largest economy, reported Wednesday that the economy grew only 1.3 percent in 2008, slowing to about half the previous year's level as the global financial crisis took its toll.
Markets looked ahead to Thursday, when the European Central Bank is widely expected to reduce its interest rate from the current 2.5 percent. Lower rates can help jump-start an economy, but weigh on a currency as investors seek higher returns elsewhere.
In other late trading Wednesday, the dollar slipped to 1.1174 Swiss francs from 1.1197 francs late Tuesday, but climbed to 1.2451 Canadian dollars from 1.2267.


Updated : 2021-04-21 00:35 GMT+08:00