Forex – Dollar gains on surging Chicago manufacturing gauge

0 – The dollar firmed against most major currencies on Thursday data revealed that manufacturing activity in the Chicago region expanded at its fastest rate in 30 years in October.

In U.S. trading on Thursday, EUR/USD was down 1.14% at 1.3579.

Data released earlier revealed that the Chicago manufacturing purchasing managers’ index jumped to 65.9 in October from 55.7 in September.

Analysts had expected the index to decline to 55.0.

The new orders component of the index jumped to a nine-year high of 74.3 from 58.9 in September.

The news boosted the dollar by fanning sentiments that the U.S. economy will pick up the pace of its recovery and eventually prompt the Federal Reserve to wind down its USD85 billion monthly asset-purchasing program, which keeps the greenback weak to spur recovery.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 25 declined by 10,000 to a seasonally adjusted 340,000, in line with market expectations.

The single currency weakened after data revealed that the euro zone’s consumer price index fell to a four-year low in October, fueling concerns that the European Central Bank may trim interest rates.

Eurostat said consumer price inflation rose 0.7% in October, the slowest pace since November 2009, after rising 1.1% in September.

A separate report showed that the euro zone unemployment rate was at a record high 12.2% in September.

The greenback was up against the pound, with GBP/USD down 0.03% at 1.6036.

In the U.K., industry data showed that U.K. house prices rose 1% this month, more than the expected 0.7% increase after a 0.9% increase in September, which gave the pound support against the dollar.

The dollar was down against the yen, with USD/JPY down 0.20% at 98.33, and up against the Swiss franc, with USD/CHF up 0.86% at 0.9070.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.48% at 1.0429, AUD/USD down 0.28% at 0.9458 and NZD/USD trading down 0.06% at 0.8263.
Canada’s dollar strengthened after official data showed that the Canadian economy grew 0.3% in August, above expectations for growth of 0.2%.

The country’s economy expanded 2% on a yearly basis, beating forecasts for an increase of 1.7%.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.71% at 80.34.

On Friday, the U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity.

Source By Breaking News Website | BreakingNews.WS