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Dollar Rides Slump in Sterling to 2-Month Highs

Investing.com – The U.S. dollar hit two-month highs against a basket of major currencies amid weakness in the pound on signs of a slowdown in the U.K. economy.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.47% to 96.87.

GBP/USD fell 0.71% to $1.2855 following data showing the U.K. economy grew just 0.2% in fourth quarter last year, well below the 0.6% posted for the third quarter and missing expectations for a 0.3% increase.

In a further sign the UK economy is on the ropes, UK manufacturing output fell 0.7% in December, confounding expectations of a 0.2% increase.

The dollar was also supported by safe-haven demand as U.S.-China trade talks, which got underway today, show little sign of progress, raising the risk the United States could ramp up tariffs on China when the current trade war truce expires on March 1.

EUR/USD fell 0.51% to $1.1276 as economic growth concerns in the eurozone continue to weigh on sentiment after the European Union cut its growth outlook on Italy and Germany last week.

USD/CAD rose 0.18% to $1.3299 as oil-price weakness weighed on the loonie.

USD/JPY gained 0.64% to Y110.43.

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