Investing.com - The dollar remained broadly lower against the other major currencies on Tuesday as the U.S. government began a partial shutdown, but upbeat U.S. manufacturing data lent some support to the greenback.
During U.S. morning trade, the dollar was lower against the yen, with USD/JPY down 0.18% to 98.04 after falling as low as 97.66 earlier.
The dollar pared back losses after a report compiled by the Institute for Supply Management showed that its manufacturing purchasing managers’ index rose to 56.2 in September from 55.7 in August.
Analysts had expected the index to decline to 55.0.
But the greenback remained under pressure as the U.S. government started a partial shutdown after Congress failed to reach an agreement on a budget for the new fiscal year.
Investor sentiment was hit by worries that the first shutdown for 17 years would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Elsewhere, the euro was trading close to seven-month highs against the dollar, with EUR/USD edging up 0.06% to 1.3533.
In the euro zone, data released on Tuesday showed that the final reading of the bloc’s manufacturing PMI came in at 51.1 in September, unchanged from the preliminary estimate, but below August’s 26-month high of 51.4.
Separately, Eurostat said the total euro zone unemployment rate was 12.0% last month, while August’s rate was revised down to 12% from 12.1%.
The dollar eased against the pound but remained close to nine-month lows, with GBP/USD up 0.15% to 1.6209.
Sterling briefly dipped lower after data on Tuesday showed that manufacturing activity in the U.K. slowed slightly in September, but remained close to August’s two-and-a-half year highs.
Markit said that its U.K. manufacturing PMI declined to 56.7 in September from a downwardly revised 57.1 in August. Analysts had expected the index to tick up to 57.3.
The dollar steady against the Swiss franc, with USD/CHF edging up 0.03% to 0.9058 after falling to 19-month lows of 0.8992 earlier Tuesday.
Elsewhere, the greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD advancing 0.70% to 0.9387, NZD/USD down 0.35% to 0.8272 and USD/CAD rising 0.17% to 1.0326.
The Australian dollar strengthened after the Reserve Bank of Australia left interest rates on hold at 2.5% on Tuesday and said the full effect of previous rate cuts were still coming through.
The RBA added that a weaker Australian dollar “would assist in rebalancing growth in the economy.”
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.11% to 80.25.
During U.S. morning trade, the dollar was lower against the yen, with USD/JPY down 0.18% to 98.04 after falling as low as 97.66 earlier.
The dollar pared back losses after a report compiled by the Institute for Supply Management showed that its manufacturing purchasing managers’ index rose to 56.2 in September from 55.7 in August.
Analysts had expected the index to decline to 55.0.
But the greenback remained under pressure as the U.S. government started a partial shutdown after Congress failed to reach an agreement on a budget for the new fiscal year.
Investor sentiment was hit by worries that the first shutdown for 17 years would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Elsewhere, the euro was trading close to seven-month highs against the dollar, with EUR/USD edging up 0.06% to 1.3533.
In the euro zone, data released on Tuesday showed that the final reading of the bloc’s manufacturing PMI came in at 51.1 in September, unchanged from the preliminary estimate, but below August’s 26-month high of 51.4.
Separately, Eurostat said the total euro zone unemployment rate was 12.0% last month, while August’s rate was revised down to 12% from 12.1%.
The dollar eased against the pound but remained close to nine-month lows, with GBP/USD up 0.15% to 1.6209.
Sterling briefly dipped lower after data on Tuesday showed that manufacturing activity in the U.K. slowed slightly in September, but remained close to August’s two-and-a-half year highs.
Markit said that its U.K. manufacturing PMI declined to 56.7 in September from a downwardly revised 57.1 in August. Analysts had expected the index to tick up to 57.3.
The dollar steady against the Swiss franc, with USD/CHF edging up 0.03% to 0.9058 after falling to 19-month lows of 0.8992 earlier Tuesday.
Elsewhere, the greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD advancing 0.70% to 0.9387, NZD/USD down 0.35% to 0.8272 and USD/CAD rising 0.17% to 1.0326.
The Australian dollar strengthened after the Reserve Bank of Australia left interest rates on hold at 2.5% on Tuesday and said the full effect of previous rate cuts were still coming through.
The RBA added that a weaker Australian dollar “would assist in rebalancing growth in the economy.”
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.11% to 80.25.