LONDON (AFX) - The dollar firmed against major currencies in midday trade on expectations of an aggressive U.S. rate cut next week and on safe-have buying, dealers said.
"The dollar's looking very perky today on both the view that there'll be an aggressive rate cut in the U.S. next week and on some safe-haven buying because the yen, the euro and sterling are looking weak," Halifax economist Steven Pearson said.
Dealers said nobody expects the European Central Bank to cut interest rates today as it was caught between high inflation and slow growth.
"It will be difficult for them to counter the latter without putting pressure on the former," Pearson said.
In the UK, sterling was under pressure from the sharp fall in share prices which prompted speculation of a rate cut next month in spite of the proximity of the election, expected on May 3.