By William L. Watts and Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) — The dollar was slightly higher versus major rivals Friday, the first day of the new quarter, finding support as investors digested a round of global manufacturing data and looked toward the latest ISM reading from the U.S.
The dollar index DXY +0.16% , which measures the greenback against a basket of six other currencies, traded at 74.49, up from 74.314 in late North American action on Thursday.
The euro EURUSD -0.23% traded at $1.4457, down from $1.4502 Thursday. The currency touched a three-week high on Thursday, after Greece’s parliament voted to approve legislation to implement austerity measures and German banks signaled they would take part in a rollover of Greek debt.
“Risky assets need global growth to remain strong to continue to rally, so they may start to look vulnerable if economic data do not start to pick up soon,” said Kathleen Brooks, research director at Forex.com.
The Markit euro-zone manufacturing purchasing managers index for June confirmed an earlier estimate showing growth in the sector at its slowest pace in 18 months. And the June PMI for Britain’s manufacturing sector fell more than expected to a 21-month low at 51.3 from a revised reading of 52.0 in May. Economists had forecast a reading of 52.0.
The British pound GBPUSD -0.19% was nudged up 0.02% versus the dollar to trade at $1.6028, while the euro eased 0.06% on sterling to trade at 90.26 pence after rising as high as 90.87 pence, its highest level since March 2010, according to FactSet Research.
“Given the continued battering being suffered by the private sector in the U.K., it is difficult to see why the pound would strengthen any time soon,” said Michael Derks, chief strategist at FxPro in London.
Meanwhile, data showed that China’s official purchasing managers index slipped to 50.9 in June from 52.0 in May, just above the 50 mark that separates expansion from contraction. Read about China’s PMI reading.
Economists surveyed by MarketWatch expect the Institute for Supply Management’s index of U.S. manufacturing activity to decline to 52% in June from 53.5% in May. The data are scheduled for release at 10 a.m. Eastern.
But hopes for a stronger reading were stoked Thursday when the June Chicago PMI rose to 61.1%, from 56.6%, well above forecasts.
“With the Greek vote behind us, and quantitative easing two officially over, all eyes will be on the [U.S.] economy again,” strategists at BNP Paribas said.
They said the ISM survey is likely to fall to 51.0% in June, to remain barely in expansion territory “as still-strong activity in the high-tech sector offsets the weakness in the East Coast regions.”
The dollar was marginally higher against the yen, with a separate survey out Friday showing that business sentiment among Japanese manufacturers sharply deteriorated in the April-June quarter. Read more on Japan’s tankan survey.
