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Dollar turns broadly higher vs. rivals in risk off trade

Published 01/03/2013, 07:42 AM
Updated 01/03/2013, 07:43 AM
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Investing.com - The U.S. dollar turned broadly higher against the other major currencies on Thursday, as market sentiment weakened amid concerns over the U.S. debt ceiling, despite news of a highly anticipated U.S. budget deal.

During European afternoon trade, the dollar was higher against the euro, with EUR/USD dropping 0.67% to 1.3098.

The euro shrugged off official data showing that the number of unemployed people in Germany rose far less-than-expected in November, rising by 3,000 after a 5,000 increase the previous month.

Analysts had expected the number of unemployed people to rise by 10,000 in November.

Investors remained cautious over the longer term outlook in the U.S., with negotiations on raising the debt ceiling still to come in February.

Sentiment strengthened on Tuesday after U.S. lawmakers passed a compromise bill to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

The greenback was also higher against the pound, with GBP/USD sliding 0.60% to 1.6157.

Earlier in the day, Markit research firm and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index fell to a seasonally adjusted 48.7 in December from a reading of 49.3 in November, slowing to a six-month low.

Economists had expected the index to ease up to 49.5 last month.

Elsewhere, the greenback was lower against the yen, with USD/JPY declining 0.57% to trade at 86.84, but higher against the Swiss franc, with USD/CHF climbing 0.54% to 0.9229.

The Swiss SVME purchasing managers' association and Credit Suisse said that its purchasing managers’ index rose to a seasonally adjusted 49.5 in December from a reading of 48.5 in November, hitting a nine-month high.

Analysts had expected the index to hold steady at 48.5 in December.

The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.14% to 0.9863, AUD/USD dipping 0.05% to 1.0499 and NZD/USD falling 0.19% to 0.8325.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.49% to 80.29.

Later in the day, the U.S. was to release a report on ADP nonfarm payrolls, as well as its weekly government report on initial jobless claims. In addition, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.


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