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Dollar pushes higher on upbeat U.S. data

Published 09/05/2013, 10:52 AM
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Investing.com - The U.S. dollar pushed higher against the other major currencies on Thursday, after the release of upbeat U.S. economic reports added to speculation that the Federal Reserve coud begin tapering its stimulus program as soon as this month.

During U.S. morning trade, the dollar was higher against the euro, with EUR/USD retreating 0.68% to 1.3117.

The Institute of Supply Management said that its non-manufacturing purchasing managers' index rose to 58.6 in August, from a reading of 56.0 the previous month, hitting ta 29-month high. Analysts had expected the index to fall to 55.0 last month.

Separately, official data showed that U.S. factory orders fell 2.4% in July, less than the expected 3.3% decline, following an upwardly revised 1.6% rise the previous month.

In addition, the Department of Labor said the number of people filing for initial jobless benefits in the week ending August 30 fell by 9,000 to a seasonally adjusted 323,000, compared to forecasts for a decline of 2,000.

The data came after an ADP report showing that 176,000 jobs were created in the U.S. private sector in August, less than the expected 180,000 increase, after a downwardly revised 198,000 rise the previous month.

The euro came under pressure after European Central Bank President Mario Draghi earlier said the central bank's monetary policy will remain accomodative for as long as necessary and that interest rates should remain at present or lower levels for an extended period of time.

Speaking at a press confrence at the end of the ECB policy meeting, Draghi also said that downide risks, including renewed geopolitical tensions, continue to weigh on the outlook for growth.

The comments came after the ECB held its benchmark interest rate at a record-low 0.5%.

The greenback was also higher against the pound, with GBP/USD shedding 0.25% to 1.5584.

In a widely expected move, the Bank of England held its benchmark interest rate at 0.50% and kept the size of its asset purchase program unchanged at GBP375 billion.

Elsewhere, the greenback was higher against the yen and the Swiss franc, with USD/JPY adding 0.29% to trade at 100.03, and with USD/CHF jumping 0.99% to 0.9446.

At the end of its two-day policy meeting, the Bank of Japan said it will expand the monetary base at an annual pace of JPY60 trillion to JPY70 trillion, leaving policy unchanged.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD edging up 0.13% to 1.0509, AUD/USD sliding 0.49% to 0.9129 and NZD/USD falling 0.11% to 0.7896.

Official data earlier showed that Australia's trade balance unexpectedly swung into a deficit of AUD0.77 billion in July, from a downwardly revised surplus of AUD0.24 billion in June. Analysts had expected the trade surplus to narrow to AUD0.05 billion in July.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.55% to 82.66.


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