Market info

Dollar firms on stronger U.S. economic data

03 Feb  - Fundamental 

The dollar firmed against major rivals Wednesday on stronger U.S. economic data and renewed credit concerns in the euro zone.

What prices are doing: The dollar rose 0.3% against the euro at $1.3921 and edged up 0.3% versus the U.K. pound to $1.5928. It gained 0.75% against the Japanese yen at ¥91.06.

What's moving the market: A report from the Institute for Supply Management that showed that the manufacturing sector grew last month pushed the dollar higher. The group's index of manufacturing activity rose to 50.5% in January from 49.8% in December.

Payroll firm Automatic Data Processing said that the pace of job cuts is slowing, as private-sector employers shed 22,000 jobs in January, the fewest cuts since February 2008.

But a separate jobs report from outplacement firm Challenger, Gray and Christmas Inc. suggested job cuts accelerated last month. Employers surveyed buy the firm announced plan for 71.482 layoffs, a reversal from a downward trend in layoff announcements.

The dollar was also strengthened as concerns about debt in Greece, Portugal and Spain resurfaced.

What analysts are saying: «There's a feeling that there is a bit of divergence between U.S. growth, which is looking increasingly better, and the sluggishness out of the euro zone,» said Brian Dolan, chief currency strategist at Forex.com.

He added that investors are hoping for a positive January jobs report due Friday, and they are pricing in their expectations and bidding on the dollar leading up to it.

Economists surveyed by Briefing.com expect nonfarm payrolls to have gained 13,000 job in January, after cutting 85,000 in December.

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