Investing.com - The dollar rose to fresh one-month highs against the other major currencies on Tuesday, after the release of upbeat U.S. manufacturing activity data added to optimism over the strength of the economy.
USD/JPY jumped 0.98% to 113.78.
The Institute for Supply Management said its index of purchasing managers inched up to 49.5 last month from a reading of 48.2 in January. Analysts had expected the manufacturing PMI to rise to 48.5 in February.
The safe-haven yen strengthened earlier after data showed that activity in China’s manufacturing sector contracted for the seventh straight month in February.
The official manufacturing PMI fell to 49.0 from January's reading of 49.4, falling further below the 50 level that separates growth from contraction. Economists had expected the index to tick down to 49.3.
The private sector Caixin manufacturing PMI was also weaker, falling to 48.0, from 48.4 in January, undershooting market expectations of 48.3.
EUR/USD slipped 0.27% to 1.0846.
Eurostat said that the euro zone’s unemployment rate fell to 10.3% from 10.4% in December. This is the lowest rate recorded in the euro area since August 2011. Analysts had expected the jobless rate to hold steady at 10.4% in January.
But sentiment on the single currency remained vulnerable after data on Monday showed that the euro area fell back into deflation in February, cementing expectations for more easing by the European Central Bank at its upcoming meeting on March 10.
The dollar was lower against the pound, with GBP/USD adding 0.19% to 1.3941 and was little changed against the Swiss franc, with USD/CHF at 0.9988.
Research group Markit said that its U.K. manufacturing PMI fell to 50.8 last month from a reading of 52.9 in January. Analysts had expected the index to inch down to 52.2 in February. The reading was its lowest level since April 2013.
Meanwhile, the Australian and New Zealand dollars were weaker, with AUD/USD down 0.08% at 0.7138 and with NZD/USD edging down 0.15% to 0.6578.
Also Tuesday, the Reserve Bank of Australia held interest rates at a record low 2%, in a widely expected move.
USD/CAD dropped 0.547% to 1.3467 after Statistics Canada said gross domestic product expanded 0.2% in December from a month earlier, slightly higher than forecasts for growth of 0.1%. Canada’s economy grew 0.3% in November.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% at a fresh one-month high of 98.52.