Special Report: Global Financial Crisis
NEW YORK, Dec. 19 (Xinhua) -- The dollar rose against major currencies Friday after the U.S. government announced a rescue plan for the auto industry and Japan's central bank cut its key rate.
President George W. Bush announced Friday that General Motors Corp. and Chrysler LLC would get 13.4 billion dollars in initial government loans to continue operations.
The automakers will also get an additional 4 billion dollars in February to make up a total of 17.4 billion dollars in assistance.
"These are not ordinary circumstances," Bush said while announcing the aid.
There's "too great a risk" that a bankruptcy filing would send the economy into a "deeper and longer recession," he added.
The dollar gained strength as the bailout plan allayed concerns that the collapse of the auto giants would trigger a ripple effect.
The greenback was also bolstered by the latest rate cut from the Bank of Japan. The bank cut its key interest rate to 0.1 percent from 0.3 percent Friday to support the economy and halt the yen's appreciation.
The Japanese central bank also introduced new steps to pump more money into the banking system to combat a credit crunch.
The euro traded at 1.3887 dollars in late New York trading compared with 1.4313 dollars late Thursday. The pound fell to 1.4859 dollars from 1.5070 dollars.
The dollar appreciated against other currencies as well, rising to 1.2221 from 1.1997 Canadian dollars, from 89.42 to 89.45 Japanese yen, and to 1.1073 from 1.0754 Swiss francs.