Dollar trades mixed ahead of BoE, ECB meetings

Dollar falls against euro, jumps versus the pound ahead of rate meetings; slips against yen

The dollar slumped against the euro but jumped against the British pound Monday on a better-than-expected reading of U.S. manufacturing and ahead of interest-rate decisions this week in Europe.

The 16-nation euro rose to $1.2827 in New York trading from $1.2794 late Friday. The British pound sank to $1.4269 from $1.4456, while the dollar slipped to 89.60 yen from 89.88 yen.

ECB President Jean-Claude Trichet has indicated the bank will likely hold rates steady at 2 percent at Thursday's meeting, while the Bank of England is expected to chop rates by as much as 1 percentage point.

The Reserve Bank of Australia also has a board meeting scheduled for Tuesday, and many analysts expect the central bank to lower the main interest rate by 1 percentage point there as well.

Lower interest rates often drive investors from a currency as they move funds in order to earn better returns. The pound also lost ground against the euro Monday as investors priced in the expected rate cut in Britain.

The dollar also drew support from the Institute for Supply Management's report on manufacturing. The ISM's manufacturing index for January rose to 35.6 from December's 28-year low of 32.9. A reading under 50 still indicates contraction, but the number was better than had been expected.

In other New York trading, the dollar gained to 1.1630 Swiss francs from 1.1622 late Friday, and jumped to 1.2449 Canadian dollars from 1.2290.