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Forex - Dollar steady against euro, yen in subdued trade

Published 09/03/2012, 05:17 AM
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Investing.com - The U.S. dollar was steady against the euro and the yen on Monday, as markets anticipated the European Central Bank's policy setting meeting and U.S. non-farm payrolls data later in the week.

During European morning trade, the dollar was slightly higher against the euro, with EUR/USD slipping 0.07% to 1.2568.

The dollar remained under pressure after Federal Reserve Chairman Ben Bernanke said Friday that the Fed would act as needed to strengthen the U.S. economic recovery, but he stopped short of indicating that a fresh round of stimulus is imminent.

The single currency continued to be supported by expectations that the ECB is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on Thursday.

But concerns over the outlook for growth weighed after revised data showed that the euro zone’s manufacturing sector contracted for the 13th month in a row in August.

Markit said the bloc’s manufacturing purchasing managers’ index rose to 45.1 from July's 37-month low of 44, but remained well below the 50 mark that separates growth from contraction.

The greenback was fractionally lower against the pound, with GBP/USD inching up 0.07% to 1.5876.

The pound found support after data showing that the rate of contraction in the U.K. manufacturing sector eased significantly in August.

Markit said that its U.K. manufacturing PMI rose to 49.5 in August from a reading of 45.4 in July, beating expectations for an increase to 46.2.

Elsewhere, the greenback was little changed against the yen and the Swiss franc, with USD/JPY dipping 0.04% to 78.35 and USD/CHF inching up 0.01% to trade at 0.9550.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.02% to 0.9858, AUD/USD falling 0.77% to trade at 1.0244 and NZD/USD down 0.62% to 0.7984.

The growth linked Australian and New Zealand dollars weakened earlier after official data showed that activity in China’s manufacturing sector slumped to a nine-month low in August, adding to fears that its economy is slowing faster than estimated.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.12% to 81.30.

Trade looked likely to remain thin on Monday, with markets in the U.S. closed for the Labor Day holiday.


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