Dollar Extended Losses on Manufacturing - 4.1.2012
US Dollar
Asian stocks were somewhat mixed on Wednesday, although the major US stock indices rallied yesterday on global market optimism. Japanese Nikkei however advanced 1.24% to 8560.11, following the US S&P 500 which gained 1.55% to 1277.06. The dollar extended losses yesterday after US manufacturing rose at the fastest pace in six months, adding to evidence manufacturing is improving from India to the UK. The Institute for Supply Management’s factory index climbed to 53.9 last month from 52.7 in November. In Asian trading hours today the greenback remained close to yesterday’s lows before reports forecast to show orders at US factories grew and the nation’s services industry expanded; the dollar index fell to the lowest level since December 21 – 79.51.
Euro
The single currency gained ground against the safety of the US and Japanese currencies on growing global optimism and after Germany reported that seasonally adjusted jobless numbers posted a larger-than-expected decline of 22000 in December, while the adjusted jobless rate fell to 6.8% from 6.9%. The euro closed above 1.30 against the dollar having gained almost 120 basis points. In Asian trading hours the pair remained in a narrow range – 1.3022-1.3072, before
Germany plans to sell 5 billion euros of bonds today and Portugal will seek as much as 1 billion euros.
Canadian Dollar
The Loonie as the currency is nicknamed is one of the best performers of the end of December and the beginning of January – yesterday the greenback fell to a four-week low against the Canadian counterpart (1.0075). As no important macroeconomic data is expected to be released in Canada today, the currency is mainly driven by external factors, including favorable reports from the US and surging oil prices. Today the Loonie paired partly its previous gains and the US dollar recovered to 1.0130 at the beginning of the European trading session.