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Dollar mixed as US service sector index contracts

Dollar mixed as US service sector index contracts

The dollar was mixed against major currencies Tuesday after a private report on the service sector showed a seventh straight month of contraction, while Federal Reserve Chairman Ben Bernanke told Congress the economy should start growing again later this year.
The assessment of the country's financial health was Bernanke's most optimistic since the recession struck with force last year. But he warned that even after a recovery gets under way, economic activity is likely to be subpar.
That means businesses will stay cautious about hiring, driving up the nation's unemployment rate and causing "further sizable job losses" in the coming months, he told the Joint Economic Committee.
The 16-nation euro slipped to $1.3313 in late New York trading from $1.3373 late Monday, while the British pound inched up to $1.5070 from $1.4966. The dollar rose slightly to 98.98 Japanese yen from 98.87 yen.
A private measure of the U.S. services sector contracted for the seventh straight month in April but at a slower pace, the latest sign the economic downturn could be moderating.
The services index from the Institute for Supply Management, a Tempe, Arizona-based trade group of purchasing executives, came in at 43.7 in April compared with 40.8 in March. Any reading below 50 indicates the service sector, where most Americans work, is contracting.
Tuesday's reading was higher than economists expected and provided another sign the economy's steep downturn could be bottoming out.
Bernanke didn't provide details about how 19 large banks fared on "stress tests." Results, to be released Thursday, should shed light on which banks may need government support if the recession were to worsen.
Another important piece of data due later this week is the Labor Department's April employment report. Economists predict that the report will show that the unemployment rate rose to 8.9 percent in April and that 620,000 U.S. jobs were lost.
In other late trading Tuesday, the dollar advanced to 1.1343 Swiss francs from 1.1284 francs late Monday, but edged down to 1.1759 Canadian dollars from 1.1774.


Updated : 2021-08-05 20:43 GMT+08:00