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Dollar remains higher despite weak Empire State report

Published 04/15/2015, 08:37 AM
© Reuters.  Dollar holds gains vs. rivals even as Empire State data disappoints
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Investing.com - The dollar remained broadly higher against a basket of other major currencies on Wednesday, even after data showed that manufacturing conditions in the New York area contracted unexpectedly in April, as markets awaited a report on U.S. industrial production later in the day.

In a report, the Federal Reserve Bank of New York said that its general business conditions index decreased to -1.2 this month from a reading of 6.9 in March. Analysts had expected the index to inch up to 7.0 in April.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.40% to 99.40.

EUR/USD dropped 0.68% to 1.0584 after the European Central Bank said it was maintaining its benchmark interest rate at a record-low 0.05%, in line with market expectations. The central bank also held its marginal lending at 0.30% and left its deposit facility rate unchanged at minus 0.20%.

ECB president Mario Draghi was expected to discuss the effects of the bank's €1.1 trillion quantitative easing program on the region's economy at the press conference.

The pound was also lower, with GBP/USD slipping 0.13% to 1.4763.

Elsewhere, the dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.18% to 119.61 and with USD/CHF rising 0.33% to 0.9757.

The Australian, New Zealand and Canadian dollars were broadly weaker, with AUD/USD declining 0.55% to 0.7585 and NZD/USD shedding 0.26% to 0.7502.

The export-related currencies came under pressure after data earlier showed that while China’s economy grew 7.0% in the first quarter, matching forecasts, it was still the slowest rate of growth in six years.

China is Australia's biggest export partner and New Zealand's second biggest export partner.

Also Wednesday, the Westpac Banking Corporation said Australian consumer sentiment fell 3.2% this month, after a 1.2% decline in March.

Meanwhile, USD/CAD climbed 0.51% to trade at 1.2550 after data showed that Canadian manufacturing sales dropped 1.7% in February, compared to expectations for a 0.2% fall. January's figure was revised to a 3.0% decline from a previously estimated 1.7% slide.

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