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Forex - EUR/USD drops as dollar gains on advancing U.S. factory data

Published 10/31/2013, 01:55 PM
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Investing.com - The dollar shot up against the euro and most other currencies on Thursday after data revealed that manufacturing activity in the Chicago region expanded at its fastest rate in 30 years in October.

In U.S. trading on Thursday, EUR/USD was down 1.04% at 1.3594, up from a session low of 1.3584 and off from a high of 1.3738.

The pair was likely to find support at 1.3474, the low from Oct. 16, and resistance at 1.3818, Monday's high.

Data released earlier revealed that the Chicago manufacturing purchasing managers’ index jumped to 65.9 in October from 55.7 in September.

Analysts had expected the index to decline to 55.0.

The new orders component of the index jumped to a nine-year high of 74.3 from 58.9 in September.

The news boosted the dollar by fanning sentiments that the U.S. economy will pick up the pace of its recovery and eventually prompt the Federal Reserve to wind down its USD85 billion monthly asset-purchasing program, which keeps the greenback weak to spur recovery.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 25 declined by 10,000 to a seasonally adjusted 340,000, in line with market expectations.

The single currency weakened after data revealed that the euro zone's consumer price index fell to a four year low in October, fueling concerns that the European Central Bank may trim interest rates.

Eurostat said consumer price inflation rose 0.7% in October, the slowest pace since November 2009, after rising 1.1% in September.

A separate report showed that the euro zone unemployment rate was at a record high 12.2% in September.

The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 1.10% at 0.8470 and EUR/JPY trading down 1.27% at 133.61.










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