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Dollar hits session highs vs. euro, pound

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Shutterstock photo - The dollar was higher against the euro and the pound on Tuesday as weak economic data out of the euro zone and the U.K. bolstered safe haven demand for the greenback.

During European morning trade, the dollar rose to session highs against the euro, with EUR/USD sliding 0.16% to 1.2829.

In the euro zone, a string of weak data fuelled doubts over the strength of the region's recovery in the first quarter.

Official data showed that the euro zone unemployment rate rose to an all-time high of 12% in February compared with an original estimate of 11.9% for January, which was revised up to 12%.

A separate report showed that the euro zone's manufacturing purchasing managers' index ticked up to 46.8 in March, from a final reading of 46.6 the previous month, still substantially below the 50 mark that separates growth from contraction.

Germany's manufacturing PMI dropped back into contraction territory, falling to 49 in March from a final reading of 50.3 in February, as new orders fell.

The dollar also hit session highs against the pound, with GBP/USD down 0.29% to 1.5187.

Sterling came off session highs after data showed that the U.K. manufacturing PMI rose to 48.3 in March from 47.9 in February, but came in below expectations for a reading of 48.5.

The weak data added to fears over the risk of a triple-dip recession and fuelled expectations that the Bank of England could restart its asset purchase program as soon as this week.

The dollar was trading close to five-week lows against the firmer yen, with USD/JPY dipping 0.07% to 93.16.

The yen's gains looked likely to remain limited as expectations for more aggressive easing measures by the Bank of Japan under new Governor Haruhiko Kuroda remained intact.

The dollar was little changed against the Swiss franc, with USD/CHF inching down 0.01% to 0.9464.

In Switzerland, a report showed that the SVME manufacturing PMI dropped to 48.3 in March, from 50.8 in February, missing expectations for a reading of 50.2.

The greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD skidding 0.22% to 1.0143, AUD/USD rising 0.35% to 1.0458 and NZD/USD climbing 0.47% to 0.8408.

Earlier Tuesday the Reserve Bank of Australia left rates on hold at 3.0% in a widely expected decision and said that previous rate cuts were beginning to have an expansionary effect on the economy.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.04% to 82.93.

The U.S. was to release a government report on factory orders later in the trading day. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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