Dollar up on emerging-markets concerns, U.S. data
New York (Feb 20) The U.S. dollar jumped against the Australian dollar on Thursday after a weaker-than-expected reading of a Chinese manufacturing gauge, and got some additional support from mostly positive U.S. data.
Currency investors fretted about emerging markets after the HSBC/Markit “flash” version of its monthly China’s Purchasing Mangers’ Index fell to 48.3 in Feburary, the lowest level in seven months.
The Australian dollar fell as a result, to 89.61 U.S. cents from 90.04 U.S. cents late Wednesday. The currency is often sensitive to data from China, which is the biggest export market for Australia. The results also dragged most Asian stocks into the red .
The U.S. dollar declined against the Japanese yen early Thursday as Japan’s trade deficit widened more than expected to ¥2.79 trillion ($27.2 billion) in January, compared to December’s ¥1.30 trillion, data showed on Thursday. But the greenback essentially recovered the lost ground after a round of mostly positive economic data in the U.S. It last traded at ¥102.29, from ¥102.32 late Wednesday.
The U.S. Markit flash PMI, an early indicator of U.S. manufacturing strength jumped to 56.7 in February, its highest level in almost four years. Separately, the number of people applying for unemployment benefits fell slightly, and U.S. consumer prices rose 0.1% in January.
After the data, the ICE dollar index, which tracks the U.S. unit against six other currencies, was at 80.276, up from 80.191 late Wednesday. The WSJ Dollar index, an alternate gauge of the greenback’s strength against a broader basket of rival currencies, inched higher to 73.69 from 73.62.
The dollar index was also supported by a modestly weaker euro, which fell to $1.3716 from $1.3733 late Wednesday after disappointing euro-zone PMI data. The monthly gauge of activity across the manufacturing and services sectors of the 18-nation euro zone, fell to 52.7 in February from 52.9 the previous month and missed FactSet’s estimates of a 53 reading. The index was dragged down by weakness in France.
In other foreign-exchange trading, the British pound moved a little higher to $1.6683, compared to $1.6681 late Wednesday.
Source: MarketWatch
