Dollar drops as euro surges on upbeat data

13:20, February 02, 2011      

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The U.S. dollar slipped against major currencies in late New York trading on Tuesday as the euro strongly surged due to upbeat economic data.

Manufacturing activity across the euro zone accelerated at its fastest pace in nine months, with the January purchasing managers index for the sector rising unexpectedly to 57.3 from 57.1 in December.

Meanwhile, German's Federal Labor Office reported that unemployment showed a seasonally adjusted decline of 13,000 in January, larger than previous forecast.

The euro reached as high as 1.3836 against the dollar in Tuesday's trading session.

The European Central Bank will meet later this week to discuss monetary policies. Some analysts predicted that the ECB might consider a possible interest rate raising to curb inflation in the euro zone.

Although the recent turmoil in Egypt has lifted the dollar due to safe-haven investment in the past few days, it is no longer directing trading activities, according to some analysts.

The dollar index, which measures its performance against a basket of six other currencies, slipped to 76.995 on Tuesday from 77.777 late Monday. It fell as low as 76.969, the weakest in nearly three months.

In late Tuesday trading, the dollar bought 81.40 yen, comparing with 82.04 late Monday, and the euro rose to 1.3820 dollars from 1. 3689.

The British pound also rose to 1.6139 dollars from 1.6019. The dollar fell from 0.9440 to 0.9363 against Swiss francs, and also fell to 0.9922 Canadian dollars from 1.0014.

Source: Xinhua
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