Investing.com - The dollar fell against the euro on Thursday following the release of upbeat private sector data from the euro zone, while the Swiss franc moved higher after the government moved to curb mortgage lending.
The euro turned higher against the dollar after data showed that private sector activity in the euro zone got off to a strong start in 2014, as growth picked up in Germany, while the rate of the downturn in France eased.
EUR/USD hit 1.3646, the highest since January 16 and was last up 0.62% to 1.3630.
The euro zone’s composite output index rose to a 31-month high of 53.2 in January, up from a final reading of 52.1 in December, fuelling hopes that the European Central Bank will not need to ease monetary policy further in order to shore up the recovery.
Manufacturing activity in Germany expanded at the fastest pace since May 2011 this month.
USD/JPY fell to lows of 104.21, and was last down 0.18% to 104.33.
Demand for the safe haven yen was boosted following losses in Asian equities markets overnight after the preliminary reading of China’s HSBC manufacturing index fell to a six-month low of 49.6 in January from 50.5 in December.
GBP/USD hit 1.6617, the highest since August 2011 and was last up 0.11% to 1.6591. Demand for sterling continued to be underpinned after a sharp fall in the U.K. unemployment rate heightened expectations that the Bank of England may raise interest rates sooner than other central banks.
The dollar was sharply lower against the Swiss franc, with USD/CHF down 0.87% to 0.9035. The Swiss franc strengthened after the Swiss government said Thursday it agreed to the Swiss National Bank’s request to raise the level of capital banks must hold to underpin mortgage lending, in order to curb the country’s booming housing market.
The Australian dollar was trading close to three-and-a-half year lows, with AUD/USD down 0.62% to 0.8796 in the wake of the Chinese PMI report. NZD/USD edged up 0.10% to trade at 0.8316.
The Canadian dollar remained close to four-and-a-half year lows against the U.S. dollar after the Bank of Canada expressed concern over the inflation outlook on Wednesday, and indicated that a rate cut could be imminent. USD/CAD was up 0.55% to 1.1145, after rising as high as 1.1174 earlier.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.45% to 80.95.