Forex - Dollar gains as U.S. factory data surprises on upside
Published Nov 01, 2013 03:51PM ET
Stimulus programs tend to weaken the dollar by driving down interest rates to spur recovery, and talk of their dismantling often strengthens the greenback.
In U.S. trading on Thursday, EUR/USD was down 0.70% at 1.3489.
The Institute of Supply Management's Manufacturing Purchasing Managers Index rose to 56.4 in October from 56.2 in September, defying expectations for a decline to 55.0.
The report came a day after data showed that manufacturing activity in the Chicago region expanded at the fastest rate in 30 years in October, while a separate report showed that U.S. initial jobless claims fell in line with expectations last week.
The euro, meanwhile, came under headwinds due to growing fears of a rate cut.
On Thursday, official data revealed that the euro zone's consumer price index rose 0.7% in October, the slowest pace since November 2009, after rising 1.1% in September, while the unemployment rate came in at a record high 12.2% in September.
The date fueled expectations that the European Central Bank may trim interest rates at a monetary policy meeting next week or not far down the road, which pressured the euro lower.
The greenback was up against the pound, with GBP/USD down 0.73% at 1.5920.
The pound came under pressure earlier after the Markit research group said the U.K. manufacturing purchasing managers' index fell to 56.0 in October from a downwardly revised reading of 56.3 the previous month.
Analysts were expecting the index to tick down to 56.1 last month.
The dollar was up against the yen, with USD/JPY up 0.42% at 98.78, and up against the Swiss franc, with USD/CHF up 0.65% at 0.9125.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.04% at 1.0427, AUD/USD down 0.20% at 0.9436 and NZD/USD trading down 0.38% at 0.8232.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.62% at 80.83.
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Written By: Investing.com
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