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Dollar turns broadly lower after strong U.S. data

Published 12/14/2012, 11:46 AM
Updated 12/14/2012, 11:53 AM
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Investing.com - The U.S. dollar turned broadly lower against the other major currencies on Friday, after the release of upbeat manufacturing and industrial production data from the U.S., while investors hoped for progress on the U.S. fiscal front.

During U.S. morning trade, the dollar was lower against the euro, with EUR/USD climbing 0.46% to 1.3137.

The euro pushed higher after Markit research group said the U.S. manufacturing purchasing managers' index climbed to 54.2 in December from a reading of 52.80 the previous month, beating expectations for a decline to 52.6.

A separate report showed that U.S. industrial production rose far more-than-expected in November, climbing by 1.1% after a 0.7% fall the previous month. Analysts had expected industrial production to rise 0.3% in November.

In the euro zone, the manufacturing PMI improved less-than-expected in December, ticking up to 47.3 from a reading of 46.2 the previous month. Analysts had expected the index to improve to 46.6 in December.

The euro zone's services PMI rose to 47.8 this month from 46.7 in November, beating expectations for a rise to 47.0.

Sentiment also remained supported after euro zone finance ministers agreed on Thursday to immediately disburse EUR34.4 billion in bailout funds for Greece. The announcement came one day after a long-awaited deal on rules for supervising euro zone banks was concluded.

The greenback was also lower against the pound, with GBP/USD adding 0.19% to 1.6143.

Elsewhere, the greenback was lower against the yen and the Swiss franc, with USD/JPY slipping 0.18% to trade at 83.49, and USD/CHF declining 0.422% to 0.9196.

The Bank of Japan said earlier that its Tankan manufacturing index deteriorated more-than-exected in the fourth quarter, falling to minus 12 from a reading of minus 3 in the previous quarter. Analysts had expected the index to fall to minus 10 this quarter.

The Tankan service sector index fell to 4 this quarter from a reding of 8 in the third quarter, compared with expectations for a decline to 5.

The greenback was mixed to lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.13% to 0.9862, AUD/USD rising 0.21% to 1.0550 and NZD/USD edging 0.19% higher to 0.8448.

In Canada, official data showed that manufacturing sales dropped 1.4% in October, confounding expectations for a flat reading, after a 0.40% rise the previous month.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.27% to 79.78.

Also Friday, the U.S. Bureau of Labor Statistics said consumer price inflation fell 0.3% in November, more than the expected 0.2% decline, after a 0.1% rise the previous month.

Core consumer price inflation, which excludes food and energy, rose 0.1% last month, disappointing expectations for a 0.2% rise, following a 0.2% increase in October.


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