Investing.com - The dollar strengthened against most major currencies on Wednesday after a stronger-than-expected manufacturing report in the U.S. quashed sentiments for Federal Reserve intervention and boosted expectations for healthy upcoming jobs reports.
The euro, meanwhile, was lower against the dollar, with EUR/USD down 0.14% and trading at 1.3218.
The U.S. Institute for Supply Management reported that its April manufacturing purchasing managers’ index surged to 54.8 in April, from 53.4 in March and well above market forecasts for a reading of 53.0.
The news doused recent murmurings that the Federal Reserve would prop up the economy via quantitative easing, a monetary stimulus tool with which the Fed buys bonds from banks, injecting liquidity into the economy to encourage investment and hiring while weakening the dollar in the process.
Disappointing consumer spending, unemployment and gross domestic product figures have fueled talk the Federal Reserve will consider stimulating the economy via quantitative easing, which is used when interest-rate cuts alone won't ensure price stability and optimal unemployment rates.
Federal Reserve Chairman Ben Bernanke has said he cannot rule out quantitative easing, but Tuesday's manufacturing data put expectations for such at bay.
Meanwhile, several high-ranking Federal Reserve officials who vote on monetary policy appeared in public in the U.S. prior to Asia's Wednesday opening stating the economy doesn't need such measures right now.
Later Wednesday in the U.S., the ADP National Employment Report will provide a glimpse of private-sector employment and serve as a precursor to Friday's official jobs report.
The strong manufacturing report has some upping jobs forecasts, which was also boosted the dollar.
Tuesday's factory data prompted markets to take a complete about-face turn from Monday, when regional data disappointed.
The Chicago purchasing managers’ index, a key gauge for Midwest manufacturing activity, fell to a seasonally adjusted 56.2 reading for April from 62.2 in March, the worst reading since November of 2009.
Analysts had expected the index to decline to only 61.0 in April.
Meanwhile, the Bureau of Economic Analysis, meanwhile, reported that consumer spending jumped 0.3% in March, slowing from 0.9% the previous month and a little below market hopes for a 0.4% gain.
Personal incomes, meanwhile, rose 0.4% in March, outpacing market forecasts for 0.3% growth.
The dollar did see some resistance, as the healthy U.S. factory data sparked risk-on trading in Asia, prompting some investors to sell the greenback to free up capital to invest in stocks and other higher-yielding assets.
The market is keeping a close eye on Europe, as Greece and France go to the polls in a few days.
The greenback, meanwhile, was down against the pound, with GBP/USD up 0.05% and trading at 1.6231.
The U.S. currency was up against the yen, with USD/JPY trading up 0.06% at 80.14, and up against the Swiss franc, with USD/CHF up 0.12% and trading at 0.9088.
The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 0.9864, AUD/USD up 0.02% at 1.0335 and NZD/USD down 0.18% at 0.8136.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% at 78.97.
Later Wednesday in the U.S., the ADP National Employment Report will provide a glimpse of private-sector employment and serve as a precursor to Friday's official jobs report.
The market will also watch for eurozone, French, German and Spanish manufacturing data as well as data measuring Germany's unemployment change and Italy's unemployment rate.
The euro, meanwhile, was lower against the dollar, with EUR/USD down 0.14% and trading at 1.3218.
The U.S. Institute for Supply Management reported that its April manufacturing purchasing managers’ index surged to 54.8 in April, from 53.4 in March and well above market forecasts for a reading of 53.0.
The news doused recent murmurings that the Federal Reserve would prop up the economy via quantitative easing, a monetary stimulus tool with which the Fed buys bonds from banks, injecting liquidity into the economy to encourage investment and hiring while weakening the dollar in the process.
Disappointing consumer spending, unemployment and gross domestic product figures have fueled talk the Federal Reserve will consider stimulating the economy via quantitative easing, which is used when interest-rate cuts alone won't ensure price stability and optimal unemployment rates.
Federal Reserve Chairman Ben Bernanke has said he cannot rule out quantitative easing, but Tuesday's manufacturing data put expectations for such at bay.
Meanwhile, several high-ranking Federal Reserve officials who vote on monetary policy appeared in public in the U.S. prior to Asia's Wednesday opening stating the economy doesn't need such measures right now.
Later Wednesday in the U.S., the ADP National Employment Report will provide a glimpse of private-sector employment and serve as a precursor to Friday's official jobs report.
The strong manufacturing report has some upping jobs forecasts, which was also boosted the dollar.
Tuesday's factory data prompted markets to take a complete about-face turn from Monday, when regional data disappointed.
The Chicago purchasing managers’ index, a key gauge for Midwest manufacturing activity, fell to a seasonally adjusted 56.2 reading for April from 62.2 in March, the worst reading since November of 2009.
Analysts had expected the index to decline to only 61.0 in April.
Meanwhile, the Bureau of Economic Analysis, meanwhile, reported that consumer spending jumped 0.3% in March, slowing from 0.9% the previous month and a little below market hopes for a 0.4% gain.
Personal incomes, meanwhile, rose 0.4% in March, outpacing market forecasts for 0.3% growth.
The dollar did see some resistance, as the healthy U.S. factory data sparked risk-on trading in Asia, prompting some investors to sell the greenback to free up capital to invest in stocks and other higher-yielding assets.
The market is keeping a close eye on Europe, as Greece and France go to the polls in a few days.
The greenback, meanwhile, was down against the pound, with GBP/USD up 0.05% and trading at 1.6231.
The U.S. currency was up against the yen, with USD/JPY trading up 0.06% at 80.14, and up against the Swiss franc, with USD/CHF up 0.12% and trading at 0.9088.
The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 0.9864, AUD/USD up 0.02% at 1.0335 and NZD/USD down 0.18% at 0.8136.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% at 78.97.
Later Wednesday in the U.S., the ADP National Employment Report will provide a glimpse of private-sector employment and serve as a precursor to Friday's official jobs report.
The market will also watch for eurozone, French, German and Spanish manufacturing data as well as data measuring Germany's unemployment change and Italy's unemployment rate.