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Dollar off highs vs. euro, ECB in focus

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Investing.com - " The dollar eased back from six-week highs against the euro on Monday after upbeat euro zone manufacturing data, but expectations for a rate cut by the European Central Bank kept the shared currency under pressure.

During European afternoon trade, the euro recovered from six-week lows against the dollar, with EUR/USD easing up 0.10% to 1.3505, after falling as low as 1.3442 earlier.

The euro found support after a report showed that the euro zone manufacturing purchasing managers index' ticked up to 51.3 in October from a final reading of 51.1 in September, unchanged from a preliminary estimate.

The single currency looked likely to remain under pressure in the run-up the ECB's monthly meeting on Thursday after data last week showing that euro zone inflation fell to a four year low in October sparked concerns that the bank may cut rates in order to safeguard the fragile economic recovery.

The dollar was almost unchanged near one-and-a-half month highs against the yen, with USD/JPY dipping 0.07% to trade at 98.62.

Demand for the dollar continued to be underpinned after unexpectedly strong U.S. manufacturing data on Friday added to expectations that the Federal Reserve could start to taper its stimulus program as soon as next month.

Elsewhere, the dollar was close to session lows against the pound, with GBP/USD rising 0.23% to 1.5962.

Sterling moved higher after data showed that activity in the U.K. construction sector expanded at the fastest rate in six years in October.

The U.K. construction PMI rose to 59.4, the highest level since September 2007, from 58.9 in September. Economists had expected an unchanged reading.

The dollar was almost flat against the Swiss franc, with USD/CHF inching up 0.02% to 0.9122.

The greenback was lower against its Australian and New Zealand counterparts, with AUD/USD advancing 0.75% to 0.9503 and NZD/USD climbing 0.59% to 0.8307.

Australia's dollar was higher after data released on Monday showed that retail sales in Australia rose 0.8% in September, beating expectations for a 0.4% increase.

The greenback slid lower against the Canadian dollar, with USD/CAD losing 0.18% to trade at 1.0403.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.13% to 80.70.

The U.S. was to release data on factory orders later in the trading day.

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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.

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