The dollar fell against the euro on Wednesday, rose versus the yen and struck a multi-year high against sterling as US President Barack Obama set to work in the White House on rescuing the ailing economy. In morning trading here, the euro rose to 1.2932 dollars from 1.2876 dollars in New York late on Tuesday. Against the Japanese unit, the dollar gained to 89.87 yen from 89.68 yen on Tuesday. Markets reacted cautiously to Obama's inauguration speech, made on Tuesday, which did not provide fresh details on measures to spur the economy and stop further damage to the financial system, dealers said. The pound hit a 7.5-year low against the greenback, at 1.3781 dolllars, after failing to get a boost from the Britain government's latest plan to rescue sick British banks announced on Monday. Sterling also hit an all-time low versus the Japanese currency of 122.99 yen. "Signs that the financial crisis is deepening in the UK has shaken investor confidence in the currency," noted NAB Capital strategist John Kyriakopoulos. "The cost of financing this rescue package... has led to investors betting that the British government may lose its top AAA credit rating," he added. That would put Britain alongside Spain, which lost its Standard and Poor's triple-A rating on Monday. S&P has also slashed Greece's rating, and is reviewing that of Ireland and Portugal. Recession was likely to become official in Britain on Friday, with data expected to show that the economy contracted for a second straight quarter in the final three months of 2008. The generally used technical definition of a recession is two quarters running of negative economic growth. Britain's unemployment rate jumped to 6.1 percent in the three months to November, official data showed on Wednesday. Under the International Labour Organization (ILO) measure of unemployment, the rate had stood at 6.0 percent for the three months to October, the Office for National Statistics (ONS) said in a statement. According the British government's own measure, the unemployment rate advanced to 3.6 percent in December from 3.3 percent in November. In trading here, the euro changed hands at 1.2932 dollars against 1.2876 dollars late on Tuesday, at 116.21 yen (115.50), 0.9383 pounds (0.9298) and 1.4800 Swiss francs (1.4783). The dollar stood at 89.87 yen (89.68) and 1.1447 Swiss francs (1.1479). The pound was at 1.3781 dollars (1.3849). On the London Bullion Market, the price of gold increased to 861.06 dollars an ounce from 853.25 dollars late on Tuesday.

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