4 August 2006, 17:44  The dollar fell sharply against major currencies

The dollar fell sharply against major currencies after key US jobs data came in well below forecasts, increasing expectations that the Federal Reserve will pause in raising interest rates next week. Official figures showed US non-farm payrolls rose by just 113,000 in July, well below the 155,000 expected. At 12.45 pm GMT, the euro rose to 1.2882 against the dollar from 1.2800 just before the figures were released, just off a fresh two-month high of 1.2888. The dollar also fell sharply against the pound, which continued yesterday's sharp gains after the surprise rate hike by the Bank of England to move above the 1.90 usd mark for the first time since mid-May. The UK currency was trading at 1.9044 usd, compared with a rate of around 1.8925 previously and off a high of 1.9055. Against the yen, the dollar fell to a low of 114.60 from 115.39 previously. The Federal Reserve Open Market Committee is scheduled to announce its next rate decision on Tuesday, August 8. Market players have increasingly been moving to price in a no-change decision after 17 consecutive rate rises. The US Fed Funds rate currently stands at 5.25 pct.

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