EUR/USD
The euro narrowed losses against the dollar on Wednesday after a widely-watched U.S. factory barometer missed expectations. The dollar gave back gains against the euro after the Institute of Supply Management reported that its manufacturing index fell to 56.6 in September from 59.0 in August. Economists had expected the index to decline less and come in at 58.5. The employment sub-index slowed to 54.6 from 58.1 in the previous month, while the new orders sub-index fell to 60.0 from 66.7. At the same time, separate data revealed that U.S. construction spending fell 0.8% in August to an annual rate of $960.96 billion. Analysts were expecting a decline of only 0.5%, and the day's data gave a few investors room to sell the greenback for profits. The dollar has posted noteworthy gains against the euro and most other currencies on sentiments U.S. monetary policy will tighten while Europe and Japan remain loose, which kept the greenback in positive territory against its European counterpart. The European Central Bank is due to announce its latest decision on interest rates and monetary policy on Thursday, and many investors avoided the single currency ahead of time.
GBP/USD
The pound traded flat against the dollar on Wednesday after a soft U.K. factory gauge hit the wire, though similarly disappointing data out of the U.S. watered down the greenback as well. Markit research group reported earlier that its U.K. manufacturing purchasing managers' index fell to 51.6 in September from a 52.2 in August, whose figure was downwardly revised from a previously estimated reading of 52.5. Meanwhile across the Atlantic, the Institute of Supply Management reported that its manufacturing index fell to 56.6 in September from 59.0 in August. Economists had expected the index to decline less and come in at 58.5, which softened the dollar. The employment sub-index slowed to 54.6 from 58.1 in the previous month, while the new orders sub-index fell to 60.0 from 66.7.
USD/JPY
The Japanese yen weakened in early Asia on Thursday with a central bank survey on consumer views due later in the day and in overall thin trade in the region. The Bank of Japan releases the fourth quarter survey on consumer sentiment and inflation expectations. Overnight, the dollar cooled its recent rally against most major currencies and traded mixed after data revealed U.S. factory floors may not be as bustling as markets once inspected. The employment sub-index slowed to 54.6 from 58.1 in the previous month, while the new orders sub-index fell to 60.0 from 66.7. At the same time, separate data revealed that U.S. construction spending fell 0.8% in August to an annual rate of $960.96 billion. Analysts were expecting a decline of only 0.5%, and the day's data gave a few investors room to sell the greenback for profits.
