24 Jan 2009, 0228 hrs IST, AP
NEW YORK: The dollar notched a new 23 1/2-year high against the pound and gained on the euro, but slipped versus the yen as a British recession was confirmed and more blue chips posted declining profits. The 16-nation euro fell to $1.2974 in late trading on Friday from $1.3021 late on Thursday. The British pound traded at $1.3768, having rallied moderately after earlier sinking to a 23 1/2-year low of $1.3501 after the British government confirmed a second consecutive quarter of economic contraction. Thursday, the pound was worth $1.3876. A standard definition of recession is two quarters of shrinking economic activity. Analysts see more interest-rate cuts coming from the Bank of England, which could help support the dollar. Cutting rates theoretically gives a boost to economic activity, but can undermine acurrency as investors transfer funds elsewhere for better returns. Meanwhile, the dollar slipped to 88.76 Japanese yen from 89.09 yen late on Thursday. The U.S., Japan and Germany, Europe's biggest economy, are already officially in recession. In the U.S., market sentiment was poor as a string of brand-name corporations reported shrinking profits. General Electric Co., one of the world's largest companies, said Friday it had a 46 percent drop in profit and forecast a difficult year. It was forced to defend its top-notch ``AAA''credit rating to investors worried about the vulnerabilities of its financing unit and slowing orders in its industrial segment. Earnings at a diverse selection of companies - motorcycle-maker Harley-Davidson Inc., office-equipment company Xerox Corp. and oilfield services provider Schlumberger Ltd. - also sank. Companies overseas are taking a hit as well. South Korea's Samsung Electronics posted its first-ever quarterly loss on Friday. In other New York trading, the dollar rose to 1.1568 Swiss francs from 1.1541 francs late Thursday, but dropped to 1.2340 Canadian dollars from 1.2532.