Investing.com - The dollar remained broadly higher against a basket of other major currencies on Monday, despite disappointing manufacturing data from New York, as data showing that Japan’s economy unexpectedly fell into recession in the last quarter continued to support the greenback.
In a report, the Federal Reserve Bank of New York said that its manufacturing index increased to 10.2 this month from a reading of 6.2 in October. Analysts had expected the index to rise to 11.1 in November.
USD/JPY hit seven-year highs of 117.06 before falling to session lows of 115.46, as steep declines in Japanese equities markets overnight boosted yen demand. The pair was last at 116.20, almost unchanged for the day.
Official data on Monday showed that Japan’s gross domestic product contracted by an annualized 1.6% in the third quarter, following a 7.3% drop in the preceding quarter. Economists had forecast growth of 2.3%.
The unexpectedly weak data added to gloom over the outlook for the global economy.
Separately, Japanese Prime Minister Shinzo Abe was expected to postpone a planned sales tax increase due to come into effect next year after a sales tax hike in April of this year acted as a drag on growth.
The prime minister was also expected to call for snap elections which could take place as soon as next month.
EUR/USD was down 0.19% to 1.2503 after Germany’s Bundesbank warned in its monthly report that the outlook for growth in the region's largest economy was likely to remain weak in the next few months.
Earlier Monday, data showed that euro zone exports jumped 9% on a year-over-year basis in September, boosting the trade surplus to 17.7 billion, from 15.4 in August. The surge in exports boosted the outlook for third quarter growth.
Elsewhere, the Swiss franc was close to 26-month highs against the single currency, with EUR/CHF at 1.2012, not far from the Swiss National Bank’s exchange rate cap of 1.20 per euro.
The Swiss franc has strengthened against the euro in recent sessions ahead of a vote later this month which could force the central bank to increase its gold reserves, a move which could restrict its ability to cap the value of the franc against the euro.
The dollar was close to 14-month highs against the pound, with GBP/USD down 0.16% to 1.5647, while USD/CHF added 0.17% to trade at 0.9606.
The Australian dollar was lower, with AUD/USD shedding 0.26% to 0.8736, while NZD/USD rose 0.25% to 0.7926. Meanwhile, USD/CAD gained 0.19% to 1.1311.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.12% to 87.71, holding below Friday's more than four-year highs of 88.36.