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Forex - Dollar turns lower after mixed U.S. economic reports

Published 02/03/2017, 10:54 AM
© Reuters.  Dollar loses ground vs. rivals, re-approaches 2-1/2 month trough
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Investing.com - The dollar turned lower against other major currencies on Friday, re-approaching a two-and-a-half month low after a string of U.S. data painted a mixed picture of the economy.

EUR/USD rose 0.30% to 1.0790, off session lows of 1.0714.

The Institute of Supply Management said its non-manufacturing purchasing managers’ index ticked down to 56.5 in January from 56.6 the previous month. Analysts had expected the index to rise to 57.0 last month.

A separate report showed that U.S. factory orders increased by 1.3% in December, beating expectations for a 1.0% rise.

The data came after the U.S. Department of Labor said the economy added 227,000 jobs in January, exceeding expectations for an increase of 175,000, The economy added 157,000 jobs in December, whose figure was revised from a previously estimated gain of 156,000.

However, the report also showed that the U.S. unemployment rate ticked up to 4.8% last month from 4.7% in December. Analysts had expected for an unchanged reading in January.

Data also showed that U.S. average hourly earnings rose 0.1% in January, disappointing expectations for an increase of 0.3%.

Sentiment on the greenback has been under pressure in recent weeks as U.S. President Donald Trump’s protectionist policies and immigration bans spur uncertainty in global markets.

Elsewhere, GBP/USD slipped 0.16% to trade at 1.2504.

Earlier Friday, market research firm Markit said its U.K. services PMI dropped to 54.5 last month from a reading of 56.2 in December. Analysts had expected the index to fall only to 55.8 in January.

USD/JPY was down 0.37% at 112.38, after rising to 113.44 earlier in the session, while USD/CHF fell 0.15% to trade at 0.9911.

The Australian and New Zealand dollars pushed higher, with AUD/USD up 0.48% at 0.7694 and with NZD/USD climbing 0.54% to 0.7326.

Data earlier showed that China’s Caixin manufacturing PMI ticked down to 51.0 in January from 51.9 the previous month. Analysts had expected the index to slip to 51.8 last month.

The data fueled fresh concerns over a slowdown in the world’s second biggest economy. China is Australia’s biggest export partner and New Zealand’s second biggest export partner.

Meanwhile, USD/CAD edged down 0.21% to trade at 1.2999.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.27% at 99.56, off session highs of 100.30 and re-approaching Thursday’s two-and-a-half month trough of 99.19.

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