* GDP data, ADP report show economy still improving
* Dollar index falls more than 4 pct in 3rd quarter
* Swiss franc down, traders cite talk of SNB action
* Fall in Chicago PMI won't change U.S. outlook
(Adds fresh comment, updates prices)
By Gertrude Chavez
NEW YORK, Sept 30 (Reuters) - The dollar weakened against
most major currencies on Wednesday, undermined by a mixed batch
of reports suggesting the U.S. economy was on a generally
stable path to recovery.
The Swiss franc, meanwhile, fell against the euro and the
dollar, with traders citing talk the Swiss National Bank may
have intervened to weaken its currency. The SNB declined
comment on the franc's price action. For more see
[].
Final data showing the U.S. economy's contraction in the
second quarter was slower than initially thought kept the euro
and sterling firm against the greenback. []
These currencies, which have recently been viewed as
proxies for risk appetite, tend to get a bid versus the
safe-haven dollar when economic data points to strengthening.
"Net-net, people are selling dollars although we don't know
for how long it would remain weak," said John McCarthy,
director of foreign exchange at ING Capital Markets in New
York.
"The data today shows there has been some stabilization in
the U.S. economy and there's even some improvement. That has
pressured the dollar. But at the end of the day, we still need
to see jobs being created ... for growth to be sustained."
Traders also said losses in the dollar have been compounded
by quarter-end flows related to foreign portfolios. Since both
the U.S. stock and bond markets rose in the third quarter and
boosted foreign funds' dollar holdings, managers needed to sell
dollars to maintain hedge ratios at the end of the quarter.
The S&P 500 <.SPX> stock index rose 14.4 percent in the
third quarter, while benchmark U.S. 10-year Treasury note
<US10YT=RR> yields fell to 3.29 percent in the same period from
a high of 3.53 percent during the quarter.
A separate U.S. survey by ADP Employer Services showed some
improvement in the private jobs sector. Although private
companies slashed 254,000 jobs in September, more than the
210,000 layoffs the market had been expecting, the number was
down from the 277,000 jobs lost in August.
A surprise fall in business activity in the U.S. Midwest
fueled mild buying in the dollar later in the New York morning.
[]
"Because the Chicago data has been volatile and generally
erratic ... the inclination is not to read too much into the
latest report," said Alan Ruskin, chief international
strategist at RBS Global Banking and Markets in Stamford,
Connecticut.
"Nonetheless, this is a further warning shot that even a
modest recovery will not be smooth sailing and is going to
reinforce the equity slippage today."
In midday New York trading, the euro rose 0.3 percent on
the day to $1.4620 <EUR=>. The euro, however, was up 4.2
percent in the third quarter.
The dollar fell 0.7 percent to 89.45 yen <JPY=> from late
on Tuesday, dropping 7 percent in the third quarter.
The ICE Futures dollar index was down 0.51 percent at
76.731 <.DXY>. The index was down 4.2 percent in the third
quarter and 1.8 percent weaker in September.
Against the Swiss franc, the dollar was up 0.2 percent at
1.0382 francs <CHF=> while the euro rose 0.5 percent to 1.5179
francs <EURCHF=>.
Sterling edged up 0.2 percent to $1.5990 <GBP=>. The
Australian dollar rose 1.2 percent to US$0.8818 <AUD=>. In the
third quarter, the Aussie currency gained 9.4 percent.
(Editing by James Dalgleish)
