Dollar strengthens on data

Story link: Dollar strengthens on data

The US dollar was stronger Wednesday as new data showed that more jobs than expected were created in the US in November, that factory orders were up in October and that worker productivity advanced in the third quarter.

Factory orders were up by 0.5 percent in October, while there were 189,000 new jobs created in November and third-quarter productivity was up at an annual rate of 6.3 percent.

Still, the Institute for Supply Management’s index of non-manufacturing businesses, covering nearly 90 percent of the US economy, was down more than had been expected in November, to 54.1 from 55.8 in October.

In total, this new data made it less likely that that the Federal Reserve will issue an interest rate cut when it meets next week.

In morning trade it took $1.4662 to buy a euro, while by early afternoon the dollar had dropped back a bit to $1.4669 to the euro but remained better than the $1.4758 to the euro where the greenback traded on Tuesday.

Elsewhere the dollar traded at $2.0267 to the pound and it took ¥110.8300 to buy a dollar.

The yen and the Swiss franc were both weaker after investors returned to more risky trades as most equities markets saw gains on the session.

Besides declines in relation to the US dollar, the yen was trading at ¥162.5765 to the euro and at ¥224.6246 to the pound, while the Swiss franc traded at SFr1.1252 to the dollar, at SFr1.6506 to the euro and at SFr2.2805 to the pound.

Meanwhile, sterling was at its lowest level in over four years versus the euro and at a six-week low in relation to the greenback after the UK service sector expanded at its slowest in four years in November and the average price of a home in the UK dropped by 1.1 percent last month.

In early afternoon trade in New York it took 72.38p to buy a euro, with predictions that it could drop as low as 72.55p to the euro by the end of the year.