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Dollar near 4-month highs vs. euro, lower vs. yen

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Shutterstock photo - The dollar was near four-month highs against the euro on Thursday and turned lower against the yen as weak data out of the euro zone and ongoing uncertainty over a bailout deal for Cyprus enhanced safe haven demand.

During European morning trade, the dollar was close to four-month highs against the euro, with EUR/USD down 0.23% to 1.2903.

The euro fell to session lows after data showed that manufacturing activity in the euro zone deteriorated to a three-month low in March.

The euro zone manufacturing purchasing managers' index fell to a seasonally adjusted 46.6 in March from 47.9 in February, compared to expectations for a reading of 48.2.

The euro zone services PMI fell to a five-month low of 46.5 from 47.9 in March.

Germany's manufacturing PMI fell to 48.9 in March from 50.3 the previous month and the country's services sector expanded at the slowest rate in four months.

The French manufacturing PMI came in at 43.9 in March, unchanged from February's reading, while service sector activity in France fell to a 49-month low of 41.9.

Elsewhere, negotiations aimed at finding an alternative solution on a bailout deal for Cyprus continued after the parliament rejected a controversial bank deposit tax in a vote on Tuesday.

The dollar fell to session lows against the yen, with USD/JPY falling 0.73% to 95.30.

Investors were looking ahead to a press conference by newly appointed Bank of Japan Governor Haruhiko Kuroda later in the day amid expectations that he would reiterate that the bank is prepared to implement more aggressive monetary easing measures.

The yen found support earlier after official data showed that Japan's trade deficit narrowed to JPY777.5 billion in February from JPY1.63 trillion in January, compared to expectations for a deficit of JPY1.01 trillion.

The dollar was lower against the pound, with GBP/USD rising 0.28% to 1.5139.

The dollar edged higher against the Swiss franc, with USD/CHF easing up 0.09% to 0.9459.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.13% to 1.0246, AUD/USD rising 0.16% to 1.0394 and NZD/USD jumping 0.84% to 0.8290.

Sentiment on the growth linked currencies was boosted after data showed that China's HSBC purchasing managers' index rose to 51.7 in March from 50.4 in February, indicating that the recovery in the world's second largest economy is still on track.

The New Zealand dollar rallied after official data showed that the country's economy expanded 1.5% in the fourth quarter, beating expectations for a 0.9% rise.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.02% to 83.03.

The U.S. was to release the weekly government report on initial jobless claims, as well as industry data on existing home sales and official data on manufacturing activity in Philadelphia later Thursday. - 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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