Investing.com - The dollar strengthened against most major currencies on Monday after a widely-watched U.S. factory barometer beat expectations, while a Bank of Japan Friday decision to beef up its stimulus programs bolstered the greenback further.
In U.S. trading on Monday, EUR/USD was down 0.26% at 1.2493.
The Institute of Supply Management reported earlier that its manufacturing purchasing managers' index rose to 59.0 in October from 56.6 in September. Analysts had expected the index to decline to 56.2 in October, and the surprise uptick sparked fresh demand for the dollar by stoking sentiments that U.S. recovery continues to gain steam.
On Friday the Thomson Reuters/University of Michigan final consumer sentiment index rose to a seven-year high of 86.9 in October from 86.4 in September. Analysts had expected the index to remain unchanged.
Also on Friday, industry data showed that the Chicago purchasing managers' index rose to a three-and-a-half year high of 66.2 in October from 60.5 in September, confounding expectations for a reading of 60.0.
Elsewhere, the greenback continued to see support against most major currencies after the Bank of Japan said last week it was raising its monetary base target to an annual increase of ¥80 trillion from ¥60-70 trillion, a preemptive move to steer the economy away from deflationary decline while improving the chances of reaching inflation goals.
Further fueling greenback demand, a Japanese government panel overseeing the Government Pension Investment Fund approved plans on Friday for the fund to raise its holding of foreign stocks to 25% of its portfolio from 12%.
Meanwhile in the euro zone, the single currency came under pressure after the U.K.-based Markit Economics research group reported that its German manufacturing PMI fell to 51.4 in October from 51.8 the previous month, disappointing expectations for the index to remain unchanged.
Markit's manufacturing PMI for the entire euro zone ticked down to 50.6 this month from 50.7 in September. Analysts had expected the index to remain unchanged, and the dollar saw added support in a rather quiet session.
The dollar was up against the yen, with USD/JPY up 1.30% at 113.78, and up against the Swiss franc, with USD/CHF up 0.27% at 0.9652.
The greenback was up against the pound, with GBP/USD down 0.08% at 1.5983.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.84% at 1.1361, AUD/USD down 1.26% at 0.8688 and NZD/USD down 0.94% at 0.7720.
The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.41% at 87.40.
On Tuesday, investors will track data on U.S. factory orders as well as the results of U.S. congressional elections.