RTTNews - The dollar continued to drift lower versus the resurgent

sterling and failed to pare much of its recent losses against

other major currencies Wednesday morning in New York.

Traders were looking ahead to the release of the minutes of

the last Federal Reserve meeting, hoping for some clues

about the mindset of policy makers as the economy showed

signs of life following the near-collapse of the financial

system.

Also today, Former Fed Chairman Paul Volcker will convene a

high profile economic panel tasked with advising President

Obama.

The dollar struggled versus the euro, extending this week's

losses to hit 1.3666. With the retreat, the dollar moved

closer to a 7-week low of 1.3721, set last Tuesday

Wednesday, a report by the German Federal Statistical Office

said the number of employed persons increased 0.1% in the

first quarter, slower than a 1% rise in the fourth quarter.

The number of employed totaled 39.9 million in the first quarter, falling below 40 million for the first time in three quarters, the statistical office said.

The dollar touched a new 5-month low of 1.5536 versus the sterling, but was able to stabilize approaching mid-morning.

Its been a brutal month for the dollar against its UK counterpart, with traders betting that the dollar's rise to a 23-year high of 1.3501 this past winter was way overdone.

The Monetary Policy Committee of the Bank of England voted unanimously to hold the key interest rate at a record low of 0.5%, the minutes of the meeting showed Wednesday. The meeting was held on May 6 and 7.

The minutes also revealed that all the nine members of the MPC stood united while deciding to raise the size of asset purchase plan by a GBP 50 billion to a total of GBP 125 billion. The central bank should seek to complete the GBP 125 billion of purchases within the next three months, the minutes showed.

The dollar saw choppy dealing versus the yen, pausing from this week's downtrend. The buck fetched 96 yen, a slight improvement from yesterday's 2-month low of 94.54.

The Japanese economy contracted by a record 4 percent in the first quarter of 2009 compared to the previous three months, the Cabinet Office said in a preliminary report on Wednesday, marking the fourth consecutive quarter of decline. That was still better than forecasts for a 4.4 percent decline after the revised 3.8 percent quarterly decline in Q4 of 2008.

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