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Dollar mixed vs. rivals as focus turns to Fed

By: Investing.com
Posted: 12/16/2013 6:29:00 AM
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Investing.com - The dollar was mixed against the other major currencies on Monday, as investors turned their attention to the Federal Reserve's upcoming policy meeting later in the week.

During European morning trade, EUR/USD edged up 0.25% to 1.3777.

The euro strengthened after data showed that the euro zone's composite output index rose to a three month high of 52.1 in December, from 51.7 in November.

The euro zone's manufacturing purchasing managers' index rose to a 31 month high of 52.7 in December, from a final reading of 51.6 in November and above expectations for a reading of 51.9.

However, the currency bloc's services PMI ticked down to 51.0 from 51.2 in November, falling short of expectations for an uptick to 51.5.

Germany's manufacturing PMI rose to a 30-month high of 54.2 in December, up from 52.7 in November and above expectations for a reading of 53.0.

The country's services PMI ticked down to 54.0 this month from 55.7 in November, compared to expectations for a decline to 55.5.

Meanwhile, investors were eyeing the outcome of the Fed's upcoming policy meeting on Wednesday, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.

Recent signs of improvement in the labor market and last week's agreement on a two-year U.S. budget deal were seen as removing obstacles to the winding back of monetary stimulus.

But with the inflation outlook remaining subdued the Fed may prefer to hold off on tapering stimulus measures until it sees more indications that the recovery is self-sustaining.

The pound edged higher against the dollar, with GBP/USD up 0.09% to 1.6309.

Elsewhere, the greenback was lower against the yen and the Swiss franc, with USD/JPY down 0.20% to 103.01 and USD/CHF shedding 0.40% to 0.8856.

The greenback was broadly higher against the Australian, New Zealand and Canadian dollars, with AUD/USD down 0.36% to 0.8935, NZD/USD slipping 0.22% to 0.8248 and USD/CAD up 0.04% to 1.0587.

The export-related currencies came under pressure after data showed that the preliminary reading of China's HSBC manufacturing index ticked down to a three-month low of 50.5 in December from a final reading of 50.8 in November. Economists had expected the index to rise to 51.0.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.30% to 80.14.

Later in the day, the U.S. was to release reports on industrial production, manufacturing activity in the New York region and the balance of foreign and domestic investment in U.S. securities.


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