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Forex - Dollar boosted by data, lingering Syria fears

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Investing.com - The U.S. dollar traded higher against most of its major rivals during Wednesday's Asian session, supported by a promising U.S. data point released Tuesday and speculation that U.S. President Barack Obama is gaining support for a possible military strike against Syria.

In Asian trading Tuesday, EUR/USD inched down 0.02% to 1.3169. The common currency continued to come under pressure amid sentiments that monetary policy will remain unchanged and loose for the foreseeable future.

The European Central Bank meets Thursday and with economic data improving and showing the euro zone is emerging from a stifling recession, the ECB may not feel the need to alter monetary policy.

GBP/USD nudged higher by 0.01% to 1.5562 after data released Tuesday revealed that the construction sector expanded at its fastest pace in six years in August.

The Markit/CIPS August U.K. construction PMI rose to 59.1 from 57.0 in July. Economists were expecting a 58.3 reading. The data fueled expectations that the Bank of England could raise interest rates sooner than it has previously indicated.

USD/JPY was flat at 99.58, although the latest series of Japanese data points have helped support yen downside. That combined with U.S. data out Tuesday have the greenback within striking distance of 100 against its Japanese rival.

In U.S. economic news out Tuesday, the Institute for Supply Management said its August manufacturing index climbed to 55.7% from 55.4% in July, good for the highest reading since June 2011. Economists expected a reading of 54.1%. The new orders index soared to 63.2% from 58.3%, but the production index fell to 62.4% from 65%.

The Bank of Japan meets Thursday and no significant alteration of the central bank's already ultra-loose monetary policy is expected.

USD/CHF nudged up 0.01% to 0.9368 while USD/CAD rose 0.07% to 1.0542. The Bank of Canada meets later today and it is widely expected the central bank will leave rates unchanged at 1%.

AUD/USD fell 0.17% to 0.9047 on what appears to be a bout of profit-taking while NZD/USD inched up 0.04% to 0.7804. The U.S. Dollar Index added 0.04% to 82.41.

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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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