Investing.com - The U.S. dollar clawed higher against its major counterparts Tuesday, as better-than-expected U.S. manufacturing data for April eased growth concerns in the world’s largest economy.
During U.S.afternoon trade, the dollar was higher against the euro, with EUR/USD slipping 0.14% to hit 1.3220.
The Institute for Supply Management reported its index of manufacturing activity rose to 54.8 from 53.4 in March, defying expectations for a decline to 53.0.
Investors remained nervous amid concerns over the outlook for the euro zone, after official data on Monday confirming that Spain’s economy entered a recession in the first quarter sparked fresh fears that austerity measures could impair economic growth in the bloc.
Market participants were also cautious ahead of weekend elections in Greece and France and the European Central Bank’s policy meeting on Thursday.
The greenback was also higher against the pound, with GBP/USD losing 0.13% to trade at 1.6215..
The pound came under pressure as a report indicated that manufacturing activity in the U.K. declined more-than-expected in April, with new export orders falling at the fastest rate since May 2009, as a result of sluggish overseas demand, particularly in the euro zone, the U.K.’s largest trading partner.
The greenback was higher against the yen and the Swiss franc, with USD/JPY advancing 0.48% to hit 80.20 and USD/CHF adding 0.18% to hit 0.9088.
Elsewhere, the greenback was broadly higher against its Canadian, Australian and New Zealand cousins, with USD/CAD falling 0.29% to hit 0.9842, AUD/USD plunging 0.78% to hit 1.0347 and NZD/USD shedding 0.37% to trade at 0.8154.
The Australian dollar fell sharply against all of its major counterparts after the Reserve Bank of Australia surprised markets with a larger-than-expected interest rate cut to 3.75%, its lowest level since early 2010, in an attempt to boost the nation's commodity-linked economy.
The export-related currencies had found support earlier after official data showed that an index of Chinese manufacturing activity rose to a 13-month high of 53.3 in April from 53.1 the previous month, but remained slightly below expectations for a reading of 53.6.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.12% at 78.95.
Trading remained light on Tuesday, as markets in France, Germany and Italy were closed for the May Day holiday.