NEW YORK - THE dollar rose against most other major currencies in midday trading on Wednesday as weak reports on housing, employment and manufacturing added to worries about the economy.

The 15-nation euro fell to US$1.2832 (S$1.939) from US$1.3022 late on Tuesday, while the British pound dropped to US$1.5232 from US$1.5400. But the dollar dipped to 95.38 yen (S$1.51) from 95.65 yen.

The Labour Department said new claims for jobless benefits fell to 529,000 last week from a 16-year high of 543,000 the previous week.

The four-week average for initial claims, however, rose to 518,000, its highest point since January 1983.

Meanwhile, the Commerce Department said consumer spending fell by 1 per cent in October. Spending by consumers makes up two-thirds of the country's economic activity, and the monthly decline was the biggest since 2001.

The government also released grim reports on housing and manufacturing. Sales of new homes plunged 5.3 per cent in October to their lowest point in nearly 18 years, while the median price of a home fell to 2004 lows.

Factory orders for durable goods dropped 6.2 per cent in October, with heavy declines in auto and airplane demand.

Stocks started lower after three days of gains before recovering as President-elect Barack Obama named former Federal Reserve Chairman Paul Volcker as a senior advisor and hammered home his message that help is coming for the economy.

By midday, the Dow Jones industrials were up about 80 points after falling as much as 167 earlier in the session.

'The dollar is coming off lows,' said Ms Meg Browne, senior currency strategist at Brown Brothers Harriman in New York.

'There's been some shift in trading, (but) it doesn't mean that this period of consolidation for the dollar is over. There's risk for the dollar weakening further next week.'

The dollar was also helped, she said, by investors' relief over policy responses from government officials in the US and abroad.

On Tuesday, the Fed said it would spend US$800 billion to help bolster the consumer lending and mortgage markets. On Wednesday, the European Commission called on the 27 European Union governments to spend US$257 billion over two years to prompt economic recovery.

In other New York trading, the dollar rose to C$1.2349 (S$1.503) from C$1.2282 late on Tuesday, and gained to 1.2060 Swiss francs (S$1.500) from 1.1878. -- AP