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Dollar remains broadly lower as U.S. data disappoints

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Investing.com -

Investing.com - The dollar remained broadly lower against a basket of other major currencies on Wednesday, after data showed that manufacturing activity in the U.S. expanded at the slowest pace in 14 months in March and that U.S. non-farm private employment rose less than expected.

The Institute for Supply Management said on Wednesday that its index of purchasing managers fell to 51.5 last month from a reading of 52.9 in February. Analysts had expected the manufacturing PMI to decline to 52.5 in March.

Earlier Wednesday, payroll processing firm ADP reported that non-farm private employment rose by 189,000 last month, below expectations for an increase of 225,000. The economy created 214,000 jobs in February, whose figure was upwardly revised from a previously reported 212,000.

Investors turned their attention to the upcoming U.S. jobs report due out on Friday, which was expected to support expectations for higher interest rates.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell 0.24% to 98.46, down from highs of 98.97 hit earlier in the session.

EUR/USD advanced 0.46% to 1.0786 after data showing manufacturing activity across the euro zone grew at the fastest pace since last May in March indicated that the recovery in the region is continuing to gain traction.

Research firm Markit said the euro zone manufacturing purchasing managers' index rose to a 10-month high of 52.2, higher than the preliminary reading of 51.9.

The pound eased off of one-and-a-half week lows, with GBP/USD holding steady at 1.4824.

Data earlier showed that the U.K. manufacturing sector expanded at the fastest rate in eight months in March.

Markit said its manufacturing PMI rose to 54.4 in March from 54.0 in February, boosted by strong domestic demand. Economists had forecast an increase to 54.3.

Elsewhere, the dollar declined against the yen and the Swiss franc, with USD/JPY down 0.49% to 119.53 and with USD/CHF retreating 0.59% to 0.9668.

The yen strengthened mildly after the Bank of Japan's tankan business sentiment survey showed that sentiment among Japan's large manufacturers held steady in the first quarter but is expected to deteriorate in the current quarter.

The Australian turned higher, with AUD/USD up 0.34% at 0.7631. Meanwhile, NZD/USD slipped 0.25% to 0.7451 and USD/CAD declined 0.37% to trade at 1.263.

Statistics Australia reported on Wednesday that building approvals fell 3.2% in February, compared to expectations for a 4.0% decline. January's figure was revised to a 5.9% increase from a previously estimated 7.9% gain.

The export-related currencies found support earlier, after data showed that manufacturing activity in China swung back into expansion territory last month. China's manufacturing PMI rose to 50.1 in March from a reading of 49.9 the previous month, confounding expectations for a slip to 49.7.

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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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