1st LD Writethru: U.S. dollar rallies ahead of nonfarm payrolls

The U.S. dollar rose against other major currencies on Thursday as investors expected Friday's nonfarm payroll report would indicate an improving U.S. labor market.

The possible upbeat job data spurred market speculation that the Federal Reserve would raise interest rates later this year. The dollar index, which measures the greenback against six major currencies, was up 0.43 percent at 96.373 in late trading, the highest level since September 2003.

On the U.S. economic front, the advance figure for seasonally adjusted initial jobless claims for the week ended Feb. 28 increased 7,000 from the previous week's unrevised level to 320, 000, exceeding market consensus, reported the U.S. Labor Department on Thursday.

The Commerce Department reported on Thursday that new orders for manufactured goods in January declined 0.2 percent, down for six consecutive months.

Moreover, the euro decreased against the U.S. dollar to the lowest level in nearly 12 years after the European Central Bank announced on Thursday that its 1.1 trillion euro quantitative easing program will kick off on March 9.

In late New York trading, the euro went down to 1.1027 dollars from 1.1074 dollars in the previous session, and the British pound declined to 1.5238 dollars from 1.5261 dollars. The Australian dollar dropped to 0.7774 dollars from 0.7820 dollars.

The U.S. dollar bought 120.16 Japanese yen, higher than 119.71 yen of the previous session. The U.S. dollar edged up to 0.9747 Swiss francs from 0.9629 Swiss francs, and it climbed to 1.2508 Canadian dollars from 1.2414 Canadian dollars. Endite