Sterling gains on US dollar, euro

Story link: Sterling gains on US dollar, euro

The US dollar weakened against major currencies on Thursday as the Chicago Purchasing Manager’s Index fell below the threshold for expansion despite the expectation of some analysts that it would rise in November. The Chicago index was at 49.9 in November, after being at 53.5 in October. It remains to be seen whether the PMI contraction was regional or will prove to be a national phenomenon when the Institute of Supply Management’s index is released Friday.

At midday in New York, the euro had added 0.7 percent to $1.3250 versus the greenback, helped by Eurozone gross domestic product figures that were up 0.5 percent in the third quarter as business activity was better and household spending was strong. The Japanese yen also was 0.7 percent higher in relation to the US currency, to ¥115.60, while sterling gained 1.2 percent against the US dollar to $1.9696. The UK currency was also higher versus the euro, adding 0.3 percent to £0.6737.

The Canadian dollar was lower in relation to the greenback on slower than expected growth in the third quarter and on the likelihood that the Bank of Canada is about to reduce interest rates. The Canadian currency dropped 0.4 percent to C$1.1422 versus the US dollar. The Australian dollar, however, added 0.8 percent against the greenback to $0.7896 on higher retail sales and the expectation that interest rates there will go up again next year. The Aussie was also higher in relation to the yen, gaining 0.2 percent to ¥91.31.