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Forex - Dollar rises on data, though concerns of Syria attack weigh

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Shutterstock photo - The dollar rose against most major currencies on Tuesday after a widely-watched U.S. manufacturing gauge beat expectations though concerns that the U.S. will proceed with plans to launch military strikes against Syria trimmed the greenback's advance.

In U.S. trading on Tuesday, EUR/USD was down 0.15% at 1.3173.

The Institute for Supply Management reported earlier that its August purchasing managers' index rose to 55.7 from 55.4 in July, beating analysts' calls for a 54.0 reading.

The report cemented views held by many that the Federal Reserve could start to unwind its USD85 billion monthly bond-buying program at its upcoming Sept. 17-18 policy meeting.

Monthly asset purchases weaken the dollar to spur recovery as long as they remain in effect, and talk of their dismantling can bolster the greenback.

Investors returned from a long, holiday weekend eager for the release of Friday's U.S. nonfarm payrolls report, which is seen as a tipping point over whether the Fed will begin tapering asset purchases this month.

The euro, meanwhile, continued to come under pressure amid sentiments that monetary policy will remain unchanged and loose for the foreseeable future.

The dollar, however, ran into headwinds after key Republican lawmakers including House Speaker John Boehner said earlier they'd support presidential calls for U.S. military attacks on Syria.

The dollar also suffered after Russia's news agency said a rocket launch was detected in the Mediterranean. Israel later said it carried out a joint missile test with the U.S.

The greenback was down against the pound, with GBP/USD up 0.15% at 1.5567.

U.K. data released earlier 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.

The dollar was up against the yen, with USD/JPY up 0.23% at 99.56, and up against the Swiss franc, with USD/CHF trading up 0.21% at 0.9364.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.17% at 1.0532, AUD/USD up 0.86% at 0.9055 and NZD/USD trading down 0.17% at 0.7796.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.10% at 82.39.

On Wednesday, the U.S. is to release data on its trade balance. - offers an extensive set of professional tools for the financial markets.

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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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