US Dollar Rebounds on Strong Data
The US dollar was higher Monday, as stronger than forecast manufacturing output boosted optimism in US recovery.
The US dollar rose nearly half a percent against a basket of currencies, sending the dollar index to 80.08. Manufacturing output, construction spending and personal income indicators were all positive today, suggesting the US economy has escaped the winter lull.
Two separate gauges of manufacturing output showed the goods producing sectors expanded faster than forecast in February. Factory output continued to support job creation among goods producers, a trend that is expected to deepen in the final month of the first quarter.
Construction spending rose 0.1 percent in January, the Commerce Department reported today in Washington. Spending on private construction rose 0.5 percent to a seasonally adjusted annual rate of $670.8 billion, offsetting negative contributions from the public sector.
Personal income increased 0.3 percent to $43.9 billion in January, the Commerce Department said in a separate report. Income growth was flat in December due to expiring jobless benefits for more than one-million long-term unemployed people.
The greenback strengthened against its key European rivals, the euro and British pound. As of 20:30 GMT, the EURUSD pair had fallen 44 pips to 1.3730. The GBPUSD pair, meanwhile, was down 76 pips to 1.6658.
In North America, the USDCAD tread water after declining sharply at the end of last week. The loonie rose steadily after the Canadian economy was reported to have grown 2 percent in 2013, topping central bank estimates. As of 20:30 GMT, the pair was trading at 1.1081.
The forex market has been closely monitoring the USDJPY pair, which been trading lower since Thursday. The pair declined another 0.1 percent to 101.38, as growing tensions in the Ukraine heightened risk aversion in the markets.
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