Dollar rises as markets consider end to rate cuts

NEW YORK (AP) - The dollar gained strength Thursday amid mixed economic data following the Federal Reserve's signal that it might be done with rate cutting for the near term.The 15-nation euro dropped to $1.5432 in midday New York trading, down from the $1.5642 it purchased in New York late Wednesday. The British pound also slid to $1.9723 from $1.9893.The dollar rose to 104.56 Japanese yen, up from 104.17 late Wednesday.The Commerce Department said consumer spending edged up 0.4 percent in March, while the Institute for Supply Management said an index of manufacturing activity in April was 48.6 for April, unchanged from March. Both readings, while weak, were better than expected and offset the 1.1 percent March drop in construction spending and the larger-than-expected jump in weekly jobless claims to 380,000.By midday, the Dow Jones industrial average had jumped more than 150 points as investors took hope from a surging dollar and oil's fall back toward $111 a barrel.The Federal Reserve cut a key interest rate by a quarter-point Wednesday, a smaller move than the aggressive easing it undertook earlier this year. There were signs the Fed may believe it has done enough to prevent a deep recession.The Fed action pushed the federal funds rate down to 2 percent, the lowest level since late 2004. It marked the seventh rate cut by the central bank since it began easing credit conditions last September.The European Central Bank has left rates unchanged at 4 percent.Though lower interest rates can spur a nation's economy, they can weigh on its currency as traders transfer funds to countries where they can earn higher returns.In other midday New York trading, the dollar rose to 1.0500 Swiss francs from 1.0338 francs late Wednesday in New York, and soared to 1.0191 Canadian dollars from 1.0046.