NEW YORK -- The dollar fell to a 14-year low against the British pound Friday as pressure on the currency persisted after recent weak economic data reinforced expectations of a cut in benchmark interest rates next year.
The greenback slumped to a 20-month low against the euro as investors turned their attention to the Institute for Supply Management survey of national manufacturing, scheduled for release at 10 a.m. The ISM index is expected to show a slight rise in November but some banks have revised down forecasts.
Data on Thursday showed manufacturing activity in the Midwest shrank in November for the first time in 3-1/2 years, which augured ill for the ISM.
"It's all ISM this morning," said Ron Simpson, director of currency research at Action Economics in Tampa, Florida. "Foreign exchange trading is limited to position adjustments ahead that number."
Sterling rose to $1.9748, the second straight day it has reached its highest since Sept. 1992 -- just before the UK abandoned the European Exchange Rate Mechanism, the precursor to the euro. Investors are looking for sterling to rally to the $2 level, last reached also in Sept. 1992.
The pair last traded at $1.9719.
The dollar fell to a 20-month low against the euro for an eighth straight day. The euro peaked at $1.3282, moving closer to its record high of $1.3667 hit in December 2004 before later easing back to $1.3267, up 0.2 percent.
Copyright Reuters 2006.
Editor's note:
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