Investing.com - The U.S. dollar traded higher against its major counterparts Thursday, despite weaker than expected U.S. manufacturing data renewing concerns over the outlook for the country’s economic recovery but safe haven demand remained supported by sustained concerns over the situation in the euro zone.
During U.S. afternoon trade, the dollar was trading close to a 22-month high against the euro, with EUR/USD giving back 0.34% to hit 1.2539.
The Commerce Department reported U.S. core durable goods orders fell by a seasonally adjusted 0.6% in April, defying expectations for a 0.9% gain and dropping for the second consecutive month.
Total durable goods orders, which include transportation items, inched by a seasonally adjusted 0.2% in April, below expectations for a 0.5% gain.
The euro dropped sharply against the greenback earlier after data indicated that manufacturing activity in the euro area contracted at the fastest pace since June 2009 in May, while service sector activity shrank at the steepest pace in seven months.
Germany manufacturing activity slowed to the lowest level in almost three years in May, sparking fresh fears over the impact of the euro zone debt crisis on the region’s largest economy.
A separate report showed that the German Ifo business climate index deteriorated significantly more-than-expected in May, pressured lower by uncertainty in the euro zone.
Market participants also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.
The greenback traded higher against the pound, with GBP/USD dipping 0.13% to hit 1.5661.
Data from the U.K. showed that the economy contracted by 0.3% in the three months to March, more than preliminary estimate for a 0.2% contraction, driven by the sharpest quarterly contraction in construction since the first quarter of 2009.
Elsewhere, the greenback was marginally higher against the yen, with USD/JPY up 0.13% to hit 79.61, and pushed higher against the Swiss franc, with USD/CHF adding 0.42% to hit 0.9586.
The greenback was higher against its Canadian, and Australian counterparts yet lower against New Zealand, with USD/CAD ahead by 0.37% to hit 1.0290, AUD/USD falling 0.26% to hit 0.9777 and NZD/USD rising 0.10% to hit 0.7532.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, moved higher by 0.37% to trade at 82.50.
Also Thursday, the U.S. Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell to a seasonally adjusted 370,000, in line with expectations.