Dollar under pressure

The U.S. currency stayed under pressure against other majors, with the euro rising to $1.3270. Sterling surged to $1.9749 above $1.9700 for the first time since September 1992 when Britain was forced to abandon its participation in the European Exchange Rate Mechanism, the precursor to the euro.

The dollar has taken a big hit as worries about the U.S. economy and outlook for rates have coincided with increasing confidence in the strength of euro zone growth and building expectations for the European Central Bank to keep raising rates.

Market players said that the dollar could see some volatility later this session, depending on what Federal Reserve Chairman Ben Bernanke has to say in a speech, and readings for U.S. manufacturing

The Institute for Supply Management’s November index of manufacturing activity, seen as a key bellwether of the overall economy’s health, will be released at 1500 GMT and is expected to show a rise to 51.5 from 51.2 the previous month.

A weak ISM reading could trigger dollar selling, while there might also be some potential for short-covering in the dollar ahead of the weekend, said the dealer at the Japanese trading house.