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Forex - Dollar drops as data surprises, stocks soar

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Investing.com - The dollar weakened against most major currencies on Tuesday after U.S. service-sector data defied negative expectations and fueled a rally in equities markets, which enticed investors out of the safety of the greenback.

Solid data out of Europe fueled the risk-on trading session as well, with U.S. stocks breaking records in intraday trading.

In U.S. trading on Tuesday, EUR/USD was up 0.13% at 1.3042.

In the U.S. earlier, the Institute for Supply Management said its February non-manufacturing index rose to 56.0 from 55.2 in January, beating analysts' calls for the index to fall to 55.0 last month.

The news sparked a rally in U.S. stock markets, which saw record highs earlier.

Elsewhere in Europe, Germany's services PMI rose to 54.7 in February, beating market calls for a 54.1 reading, according to Markit Economics.

A eurozone services PMI hit 47.9 compared with consensus forecasts for a 47.3 reading.

Elsewhere, official data released earlier revealed that eurozone retail sales rose by 1.2% in January, well above expectations for a 0.2% gain.

U.S. and European equities proved to be the asset class of choice during Tuesday's risk-on trading session, which sent the dollar sliding albeit in choppy trading at times.

The greenback, meanwhile, was slightly lower against the pound, with GBP/USD trading up 0.02% at 1.5115.

The dollar slid against the yen, with USD/JPY trading down 0.17% at 93.31, and was up against the Swiss franc, with USD/CHF trading up 0.09% at 0.9416.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.04% at 1.0276, AUD/USD up 0.50% at 1.0246 and NZD/USD trading up 0.51% at 0.8318.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% at 82.14.

On Wednesday, the U.S. is to publish data on ADP nonfarm payrolls, a precursor to official data on nonfarm payrolls to be released on Friday. The U.S. is also to release official data on factory orders and crude oil stockpiles.

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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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