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US Dollar Index Hits a More than 6-week High

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US Dollar Index Hits a More than 6-week High

The US dollar index advanced Thursday, reaching a more than six-week high amid strong manufacturing and housing data.

The dollar index, a weighted average of the greenback’s performance versus six actively traded peers, advanced 0.19 percent to 80.25, the highest level since April 7. The dollar was supported by stronger than forecast manufacturing data and a housing report indicating modest improvement in home sales.

Output at US factories rose at the sharpest rate in more than three years, contributing to another solid advance for the manufacturing sector, Markit Group reported today. The manufacturing purchasing managers’ index increased from 55.4 to 56.2 in May, as employment rose for the eleventh consecutive month.

A separate report released today by the National Association of Realtors suggests the US housing sector may be gaining momentum after a harsh first quarter. The sale of previously-owned US homes advanced 1.3 percent to a seasonally adjusted annual rate of 4.65 million, the NAR reported. The advance, which was below estimates calling for a 2.2 percent gain, is a modest improvement over March’s 20-month low.

“Some growth was inevitable after sub-part housing activity in the first quarter, but improved inventory is expanding choices and sales should generally trend upward from that point,” said NAR chief economist Lawrence Yun in a press release. “Annual home sales, however, due to a sluggish first quarter, will likely be lower than last year.”

The Commerce Department will close out the week with a report on new home sales for the month of April.

In other US data, the Conference Board’s Leading Indicator increased 0.4 percent in April, exceeding estimates. The indicator, which is used to gauge future trends in the overall US economy, suggests recovery is expected to broaden this year despite the weather-related setback in the first quarter.

The gauge of weekly US firings increased faster than forecast, the Labor Department said today. Weekly jobless claims increased 28,000 to 326,000 in the week ended May 17. The four-week moving average fell 1,000 to 322,500, official data showed.

The EURUSD fell 0.26 percent to 1.3651. The Eurozone composite PMI, which captures the performance of the manufacturing and service industries, fell from 54 to 53.9 in May, Markit Group reported. Despite the drop, the Eurozone economy remains on course for s best quarter in three years.

The GBPUSD lost ground, declining 0.25 percent to 1.6855. UK first quarter business investment rose 8.7 percent, the fastest clip since Q3 2012. However, the public sector deficit ballooned from £6.073 billion to £9.631 billion, official data showed.

The USDJPY bounced back, reaching an intraday high of 101.8135. The pair consolidated at 101.7800, advancing 0.35 percent.

The USDCAD snapped a three-day winning streak, falling from an intraday high of 1.0927 to 1.0887, declining 0.16 percent. In Canadian data, retail sales fell 0.1 percent in March, while core sales increased 0.1 percent. Both figures disappointed forecasts.

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