Dollar gains on U.S. manufacturing report, ECB expectations

Shutterstock photo - - The dollar traded higher against most major currencies on Monday as investors applauded an upbeat U.S. manufacturing gauge despite two revisions to the index that confused markets, while expectations for the European Central Bank to loosen policy also firmed the greenback.

In U.S. trading on Monday, EUR/USD was down 0.27% at 1.3597.

In the U.S., the Institute of Supply Management reported that its manufacturing purchasing managers' index for May ticked down to 53.2 from 54.9 a month earlier before correcting it two times, once to 56.0 and a second time to 55.4.

While the corrections confused markets, the dollar remained higher, as any figure over 50 signifies expansion.

Analysts were originally expecting a 55.5 reading, and expectations remained firm for the Federal Reserve to continue tapering its monthly bond-buying program, which weakens the dollar as a side effect.

Elsewhere, the single currency came under pressure on expectations that the European Central Bank will take steps to tackle low inflation rates that are threatening an already fragile recovery in the single currency bloc, including cuts to all interest rates.

Earlier Monday, official data showed that Germany's consumer price index accelerated at an annualized rate of 0.9% last month, down from 1.3% in April. Analysts had expected German consumer prices to rise by 1.1% in May.

Separately, Markit research group said that Spain's manufacturing PMI rose to 52.9 this month, from 52.7 in May, in line with expectations, while Italy's manufacturing PMI slipped to 53.2 in June from 54.0 a month earlier, missing expectations for a 53.7 reading.

The European Central Bank will decide on interest rates and monetary policy on Thursday.

The dollar was up against the yen, with USD/JPY up 0.62% trading at 102.41 and up against the Swiss franc, with USD/CHF up 0.37% at 0.8986.

The greenback was up against the pound, with GBP/USD down 0.06% at 1.6744.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.50% at 1.0899, AUD/USD down 0.71% at 0.9244 and NZD/USDD down 0.62% at 0.8447.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29% at 80.67.

On Tuesday, the U.S. is to produce data on factory orders. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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