FRX: Dollar pushes higher as U.S. data, Fed minutes eyed
Forexpros - The U.S. dollar pushed higher against its major counterparts on Tuesday, as ongoing concerns over the economic outlook for the euro zone supported safe haven demand ahead of the release of U.S. data later in the day.
During European afternoon trade, the dollar edged higher against the euro, with EUR/USD slipping 0.11% to hit 1.3306.
Earlier Tuesday, official data confirmed that the euro zone economy contracted by 0.3% in the final three months of 2011, unchanged from a preliminary estimate. Annualized gross domestic product contracted by 0.7% in the fourth quarter.
Data on Monday showed that manufacturing activity in the euro zone remained in contraction territory for the eighth successive month in March, while a separate report showed that the bloc’s unemployment rate ticked up to a record high of 10.8% in February.
The greenback was also higher against the pound, with GBP/USD shedding 0.28% to hit 1.5977.
The pound found support after a report earlier showed that the U.K. construction sector expanded at the fastest rate in 21 months in March, one day after strong U.K. manufacturing data eased investor concerns over the threat of a recession.
The greenback inched higher against the yen and the Swiss franc, with USD/JPY up 0.04% to hit 82.11 and USD/CHF rising 0.04% to hit 0.9040.
In Japan, official data showed that the monetary base fell at an annualized rate of 0.2% in March after increasing by 11.3% the previous month, underlining concerns over the risk of deflation.
Elsewhere, the greenback extended gains against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.12% to hit 0.9916, AUD/USD shedding 0.49% to hit 1.0367 and NZD/USD down 0.16% to hit 0.8220.
The Reserve Bank of Australia left interest rates on hold at 4.25% following its policy meeting earlier, but indicated that it may cut interest rates as soon as next month, amid concerns that the economy is now growing at a slower than average rate.
Earlier Tuesday, official data showed that Australian retail sales rose 0.2% in February, in line with expectations, after a 0.3% increase the previous month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, added 0.12% to hit 79.08.
Later in the day, the U.S. was to release official data on factory orders, while the Federal Reserve was to release the minutes of its March policy meeting.
