Investing.com - The dollar was higher against the euro on Tuesday following weak economic data out of the euro zone and China, while the yen gained ground against the dollar amid increased safe haven demand.
During European afternoon trade, the dollar rose to two-week highs against the euro, with EUR/USD down 0.58% to 1.2989.
The euro weakened broadly after data showed that Germany’s manufacturing PMI fell to 47.9 from 49.0 in March, well below the 50 level which separates contraction from expansion.
Germany’s services PMI came in at 49.2, down from 50.9 in March, the fastest rate of contraction in six months.
The data indicated that the euro zone’s largest economy could contract in the first quarter and fuelled speculation over a rate cut by the European Central Bank.
The euro zone’s manufacturing PMI ticked down to 46.6 from 46.8 in March, worse than expectations for an unchanged reading.
The currency bloc’s services PMI edged up to 46.6 from 46.4 in March, in line with expectations.
France’s manufacturing PMI ticked up to 44.4 in April from March’s reading of 44.0, while the French services PMI rose to an eight-month high of 44.1 in April from a final reading of 41.3 in March.
Earlier Tuesday, a report showed that the preliminary reading of China’s HSBC manufacturing PMI was 50.5 for April, down from a final reading of 51.6 in March.
The weak data appeared to point to a slower rate of growth in the manufacturing sector of the world’s second largest economy.
The dollar was lower against the traditional safe haven yen, with USD/JPY falling 0.37% to 98.86.
The dollar was higher against the pound, with GBP/USD losing 0.28% to trade at 1.5246.
In the U.K., official data showed that public sector borrowing fell to GBP120.6 billion in the financial year which ended in March, from GBP120.9 billion in the previous financial year.
The dollar rose to more-than two-week highs against the Swiss franc, with USD/CHF advancing 0.66% to 0.9403.
The greenback was stronger against its Australian, New Zealand and Canadian counterparts, with AUD/USD down 0.17% to 1.0254, NZD/USD falling 0.23% to 0.8403 and USD/CAD up 0.16% to 1.0273.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.37% to 83.09.
The U.S. was to release official data on new home sales later in the trading day.
