US dollar declines after election

The US dollar declined versus the euro, the pound and the yen Wednesday on uncertainties after Tuesday’s presidential election in the US as well as on reports showing the services sector in contraction and that more jobs were cut in October.

Investors remained unsure about how President-elect Barack Obama will attempt to solve the financial crisis as they speculated about who Mr. Obama will choose to serve as Secretary of the Treasury.

Additionally, two separate private report showing that employers in the private sector cut 157,000 jobs in October and that job layoffs last month were 79 percent higher than last year in October while the official report on jobs from the Labor Department, which is due on Friday, could show that as many as 200,000 jobs were lost last month and that the unemployment rate rose to 6.3 percent in the month.

The greenback was also hurt by new data from Institute for Supply Management, which said its non-manufacturing index dropped to 44.4 in October, showing that the services sector contracted again last month.

Meanwhile, the pound was up not only versus the greenback but also against the euro on speculation that the Bank of England will cut interest rates by 75 basis points when its Monetary Policy Committee meets on Thursday after earlier declines on a report that the services sector in the UK, which has been in contraction since May, also contracted again in October

At just about noon in New York, the pound traded at 80.52p to the euro and it took $1.6156 to buy a pound, while the dollar traded at $1.3009 to the euro and it took ¥98.955 to buy a dollar.

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