Investing.com - The dollar turned lower against the other major currencies on Thursday, after data showed that U.S. manufacturing activity fell to a seven-month low in August and as investors turned their attention to Friday’s U.S. nonfarm payrolls data.
EUR/USD rose 0.27% to at 1.1185, off session lows of 1.1128.
The Institute for Supply Management said its index of manufacturing activity dropped to 49.4 last month from July’s reading of 52.6. It was the worst reading since January and missed expectations for a slight drop to 52.0.
Earlier Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 27 increased by 2,000 to 263,000 from the previous week’s total of 261,000. Analysts had expected jobless claims to rise by 4,000 to 265,000 last week.
Market participants were now eyeing Friday’s nonfarm payrolls report for further indications on the strength of the job market after Federal Reserve Vice Chairman Stanley Fischer said earlier in the week that the U.S. labor market is almost at full strength and that the pace of interest rate increases will be data dependent.
GBP/USD rallied 1.16% to 1.3291, the highest since August 4.
The pound strengthened after data earlier showed that U.K. manufacturing activity moved back into expansionary territory in August from what had been its worst level since early 2013.
Research group Markit said its U.K. manufacturing purchasing managers’ index rose to a 10-month high of 53.3 this month from a reading of 48.2 in July. Analysts had expected the index to rise to 49.0 in August.
USD/JPY edged down 0.15% to 103.28, while USD/CHF slid 0.29% to 0.9811.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.27% at 0.7538 and with NZD/USD gaining 0.44% to 0.7281.
The Australian Bureau of Statistics said retail sales were flat in the second quarter, compared to expectations for a 0.3% rise and after an uptick of 0.1% in the three months to March.
A separate report showed that private capital expenditure declined by 5.4% in the last quarter, exceeding expectations for a 4.2% drop and following a 5.2% slide in the first quarter.
However, the Australian dollar found some support after data showed that Chinese manufacturing activity swung into expansion territory this month, with the official manufacturing PMI at 50.4, up from 49.9 in July.
China is Australia’s biggest export partner.
Elsewhere, USD/CAD held steady at 1.3102, after hitting fresh three-week highs of 1.3148 earlier in the session.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.33% at 95.70, off session highs of 96.24.