FX:Dollar jumps vs. rivals as market sentiment wanes
Forexpros - The U.S. dollar was broadly higher against its major counterparts on Thursday, as market sentiment came under pressure following a flurry of manufacturing and service sector activity reports from the euro zone and China.
During European morning trade, the dollar was sharply higher against the euro, with EUR/USD dropping 0.62% to 1.2970.
The euro weakened after preliminary data showed that the euro zone’s manufacturing purchasing manufacturers' index rose more-than-expected in September to 46.0, from 45.1 the previous month, while the service sector PMI fell unexpectedly to 46.0, from 47.2.
A separate report showed that manufacturing activity in Germany contracted at the slowest rate in six months in September, while service sector activity grew modestly.
In France, manufacturing activity tumbled unexpectedly in September, dropping to a three-and-a-half year low led by a marked reduction in incoming new business.
Also Thursday, Spain’s Treasury sold EUR859 billion worth of 10-year government bonds at an average yield of 5.66%, down from 6.64% at a similar auction last month.
The greenback was also higher against the pound, with GBP/USD falling 0.19% to 1.6191.
The pound pared losses after official data showed that U.K. retail sales fell by a seasonally adjusted 0.2% in August, compared to expectations for a 0.4% decline. Retail sales rose by 0.3% in July.
Elsewhere, the greenback was lower against the yen, with USD/JPY edging down 0.20% to hit 78.22, but higher against the Swiss franc, with USD/CHF rising 0.41% to trade at 0.9320.
In Japan, official data showed that the trade deficit widened unexpectedly to JPY0.47 trillion in August, from a deficit of JPY0.37 trillion the previous month. Analysts had expected the trade balance to remain unchanged in August.
In addition, the greenback climbed against its Canadian, Australian and New Zealand counterparts, with USD/CAD advancing 0.42% to 0.9786, AUD/USD dropping 0.81% to 1.0394 and NZD/USD slipping 0.36% to hit 0.8238.
Earlier in the day, official data showed that New Zealand's gross domestic product expanded by 0.6% in the second quarter, following an expansion of 1% in the previous quarter. Analysts had expected the GDP to rise 0.3% in the second quarter.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.44%, to trade at 79.52.
Later in the day, the U.S. was to release its weekly government report on initial jobless claims, as well as an index of manufacturing activity in Philadelphia.
