Forex- U.S. Dollar Rises on Upbeat Data; Pound Falls on Election Rumors
Investing.com - The U.S. dollar was higher after better-than-expected manufacturing PMI data, while the pound slumped amid continued Brexit uncertainty.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.2% to 97.407 as of 10:52 AM ET (14:52 GMT).
The greenback was boosted after the Markit purchasing managers’ index came in higher than expected, at 51.5 compared to 51.1 in the prior month. Still, weakness in the economy remained a concern as new orders for key capital goods fell more than expected in September. The sector has been hit by uncertainty over the year-long trade dispute between the U.S. and China.
Other data on Thursday showed that the jobs market remains healthy despite other signs of weakness in the economy. The number of Americans filing for unemployment benefits unexpectedly fell last week to a seasonally adjusted 212,000 for the week ended Oct. 19, the Labor Department said.
Still, the data confirmed expectations that the Federal Reserve will cut borrowing costs for a third time this year when policymakers meet next week. U.S. President Donald Trump has pushed for even more rate cuts, pointing to falling interest rates at other central banks around the world.
Elsewhere in forex, sterling declined as the perceived likelihood of an election before Christmas hit sentiment.
U.K. lawmakers vote in principle for a Brexit deal on Tuesday but pushed against Prime Minister Boris Johnson’s timetable passing a Brexit deal in three days, causing Johnson to push for a general election.
GBP/USD slumped 0.5% to 1.2851 while EUR/USD was down 0.2% to 1.1107. The safe haven Japanese yen inched up, with USD/JPY falling 0.1% to 108.54.
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