Forex – Dollar Holds onto Gains after Empire State Report

© Reuters. Dollar remains higher after upbeat U.S. data – The U.S. dollar held onto gains against other major counterparts on Monday, after the release of upbeat U.S. manufacturing activity data and as political woes in Europe continued to weigh on the single currency.

Data on Monday showed that the Empire State Manufacturing Index rose to 30.20 in October, beating analyst expectations of 20.70.

The greenback had weakened after data on Friday showed that U.S. consumer prices rose less than expected in September, both on a monthly and annual basis.

The report fueled uncertainty over whether the Federal Reserve will decide to raise interest rates before the end of the year.

Fed Chair Janet Yellen said Sunday that policymakers will be paying close attention to inflation data in the months ahead. She also said that the economy remains strong and the strength of the labor market calls for continued gradual increases in interest rates despite soft inflation.

EUR/USD slipped 0.14% to 1.1804 after the Spanish government said Catalan authorities must drop a bid for independence by Thursday.

The decision came after Catalan President Carles Puigdemont failed to clarify whether he has declared the region’s independence.

Spain had initially issued a Monday deadline for Puigdemont to clarify his intent, or face direct rule. Instead, the Catalan leader called for negotiation over the next two months.

Elsewhere, the pound was down 0.21% at 1.3261.

The yen was steady, with USD/JPY at 111.83, while USD/CHF added 0.13% to 0.9755.

The Australian dollar was lower, with AUD/USD down 0.34% at 0.7868, while NZD/USD edged up 0.13% to trade at 0.7192.

The Canadian dollar pushed lower, with USD/CAD up 0.55% at 1.2536.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% at 93.09 by 08:40 a.m. ET (12:40 GMT).

Leave a Reply