Dollar Advances Against Major Counterparts, Thursday, July 05, 2007 3:45:23 PM

The American dollar strengthened against the major currencies Thursday in New York. The greenback gained ground versus the euro and sterling after interest rate decisions were made during the mid-morning. Traders considered data showing that service sector growth in the U.S. unexpectedly accelerated in June.

The dollar gained against the euro Thursday in New York. The greenback retreated during the early morning, falling to an intraday low of 1.3658 at 5:50 am ET. The American currency moved higher after that, making its sharpest advance after 8:30 am. At 10:40 am, the buck reached an intraday high of 1.3579. The dollar dipped a bit lower and leveled off in the early afternoon to trade at a mark of 1.3599 at 3:33 pm. Traders mulled the European central bank`s decision to leave interest rates unchanged at a six-year high of 4.00%.

Against the sterling, the dollar advanced Thursday in New York. The American currency dipped in the early morning, hitting an intraday low of 2.0201 at 7:20 am ET. The greenback gained ground soon after that, eventually reaching an intraday high of 2.0088 at 10:40 am. After giving back some of its gains and leveling off in the early afternoon, the greenback traded at a mark of 2.0120 against its British counterpart at 3:35 pm. Traders considered the Bank of England`s expected move to hike interest rates 25-basis points from 5.50% to 5.75%.

The dollar edged higher versus the yen Thursday in New York. The dollar retreated during the early morning, falling to an intraday low of 122.34 at 5:50 am ET. The greenback advanced soon after that, eventually ticking to an intraday high of 122.99 at 10:30 am. After losing some ground in the early afternoon, the buck began to advance once again after 2:00 pm. At 3:38 pm, the American currency fetched a mark of 122.90 against its Japanese counterpart. Traders considered data showing that Japan`s leading index gained during May.

The Institute for Supply Management released its report on business activity in the service sector in the month of June on Thursday, showing that the pace of growth in the sector unexpectedly accelerated compared to the previous month. The report showed that the index of activity in the sector rose to 60.7 in June from 59.7 in May, with a reading above 50 indicating growth in the sector. Economists had been expecting the index to slip to a reading of 58.0. The unexpected acceleration in the pace of growth came in spite of a modest slowdown in the pace of new orders growth, as the new orders index edged down to 56.9 in June from 57.4 in the previous month.

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