--China's reserve ratio cut springs currency markets into action --Dollar falls across the board following China's surprise move --Brazil's central bank in the spotlight ahead of rate decision By Clare Connaghan Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- The dollar came under pressure across the board Wednesday after China reduced the reserve ratio for its banks for the first time in three years, jolting currency markets into action after a subdued European session. The buck reversed earlier gains and fell against the euro, pound and commodity-linked currencies of Australia, New Zealand and Canada. Taking effect Dec. 5, the cut lowers the reserve ratio for China's banks by half a percentage point, freeing up funds in an effort to spur growth in the slowing economy. The last time China lowered its reserve requirement was December 2008. "We see this as a decisive shift in policy stance from China," said Mark Williams, chief Asia Economist at Capital Economics. "Further reserve requirement cuts will follow over the next few month." The move helped turn sentiment around, boosting appetite towards risk- sensitive currencies. Whether this can hold, given the mounting sovereign debt crisis in the euro-zone, remains to be seen. European Economic Affairs Commissioner Olli Rehn, on his way to a key gathering of European Union finance ministers, said the euro zone is entering a "critical" 10-day period. Employment data underlined the growing economic gaps between euro-zone countries, with the number of people out of work in the 17-country bloc hitting a record high but falling to a 20-year low in Germany. Elsewhere, the Swiss franc fell to session lows against the euro after Switzerland's KOF leading indicator slumped to its lowest level in more than two years in November, signaling a sharp slowdown in economic growth as the strong Swiss franc and weaker European demand weigh on exports. The yen was also active after data released by the Japanese finance ministry showed the government spent Y9.092 trillion on currency market intervention between Oct. 28 and Nov. 28, far more than the roughly Y7.68 trillion that analysts estimate Tokyo sold in the market on Oct. 31. Looking ahead the market will be closely watching Automatic Data Processing private jobs data at 1315 GMT, widely considered a precursor to Friday's key monthly nonfarm payrolls report. Other data from the U.S. includes the Chicago Purchasing Managers Index release at 1445 GMT, pending home sales at 1500 GMT and the Federal Reserve's Beige Book at 1900 GMT. In emerging markets, China's surprise cut lifted currencies across the board with the Polish zloty and Hungarian forint both rising sharply against the euro. The focus next turns to Brazil's interest rate decision, with another cut in the country's reference Selic interest rate expected. At 1207 GMT, the euro was trading at $1.3315 against the dollar, compared with $1.3316 late Tuesday in New York, according to trading system EBS. Meanwhile, the dollar was at Y77.98 against the yen, compared with Y77.93, while the euro was at Y103.84 compared with Y103.69. The pound was at $1.5607 against the dollar, compared with $1.5590 late Tuesday in New York. The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 79.048 compared with 79.048 late Tuesday in New York. A summary of key levels for chart-watching technical strategists:

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