Investing.com - The dollar remained moderately lower against the other major currencies on Friday, after the release of upbeat U.S. manufacturing activity data as markets continued to evaluate the consequences of the Brexit vote.
The Institute for Supply Management said its index of manufacturing activity rose to 53.2 last month from May’s 51.3. Analysts had expected the factory index to tick up to 51.4.
GBP/USD slid 0.26% to 1.3276, off the 31-year low of 1.3122 set on Monday, a level not seen since 1985. The two-day selloff in sterling seen last Friday and Monday was the largest in recent history.
The pound was still recovering from the sharp losses posted after Britain’s shock decision last week to leave the European Union.
Bank of England Governor, Mark Carney, indicated on Thursday that more stimulus may be needed over the summer, sparking expectations for an upcoming rate cut.
On Friday, Federal Reserve Vice Chairman Stanley Fischer said in an interview that it was still too soon to evaluate the impact of the Brexit and that the central bank the Fed will have a better idea of economic conditions by its July meeting.
Earlier in the day, research group Markit saying that its U.K. manufacturing purchasing manager’s index rose to 52.1 last month from a reading of 50.1 in May. That was its highest level since January 2016.
Analysts had expected the index to drop back into contraction at 49.9 in May.
Meanwhile, safe-haven currencies remained supported after downbeat Chinese manufacturing data sparked fresh concerns over a slowdown in the world’s second largest economy.
USD/JPY declined 0.50% at 102.70, while USD/CHF edged down 0.15% to 0.9746.
Data on Friday showed that China’s Caixin manufacturing PMI fell to 48.6 in June from 49.2 the previous month, compared to expectations for a downtick to 49.1.
At the same time, China’s official manufacturing PMI came in at 50.0 last month from 50.1 in May, in line with expectations.
EUR/USD added 0.14% to 1.1118, while EUR/GBP gained 0.54% to 0.8377.
Eurostat said on Friday that the euro zone’s unemployment rate dropped to 10.1%, from April’s reading of 10.2%. The reading was in line with forecasts and the lowest since July 2011.
The Australian and New Zealand dollars were higher, with AUD/USD up 0.43% at 0.7482 and with NZD/USD advancing 0.55% to 0.7172.
Elsewhere, USD/CAD slipped 0.26% to trade at a one-week low of 1.2891.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.13% at 95.83.