Dollar Boosted By Strong Chicago PMI Data and other Top Forex News.

by Joe Oliver, Forex Trading-Pips

The euro dropped from the highest level in three weeks versus the US dollar on Friday as demand for euro denominated assets faded following disappointing German retail sales data and the region’s unemployment rose to a record. Forex News discusses the recent strength in US$ and other Top Forex News: 

The dollar surged higher against most major currencies on Friday after Chicago PMI data beat all expectations, adding to speculation the Fed may soon begin to scale back its $85 billion bond-buying program.


The Chicago purchasing managers’ index (PMI) climbed to 58.7 this month from 49.0 in April, beating analysts expectations for a rise to 50.0. Any level above 50 indicates expansion. The data was the largest increase in Chicago PMI for over 30 years.

In a separate report Thomson Reuters/University of Michigan’s final consumer sentiment index rose to 84.5 in May from 83.7 in April, also beating analysts predictions who were expecting the index to remain unchanged.

The positive news increased speculation that the Fed will soon begin to taper its asset purchase program, which weakens the dollar.

In Europe the single currency was hit by record unemployment figures this morning when official data showed that the unemployment rate rose to a new record high of 12.2% in April, from 12.1% the previous month, in line with expectations.

In todays U.S. session, EUR/USD was down 0.65 percent at 1.2962, up from a session low of 1.2945 and off from a high of 1.3049. whilst USD/JPY was up by just 0.07 percent at 100.65. The dollar was also slightly higher against the pound, rising 0.34 percent to 1.5182.

More Coverage of the Day’s Top Story

  • FT: Emerging market currencies suffer heavy losses. – Emerging market currencies suffered heavy losses and the dollar index rose as investors bet that improving data on the U.S. economy would encourage the Federal Reserve to reduce its monetary stimulus that has boosted investment into riskier assets.
  • DailyFX: USD Correction takes shape ahead of Fed Beige book, NFPs. – The Dow Jones-FXCM U.S. Dollar regained its footing on Friday amid the slew of positive developments coming out of the world’s largest economy.

More Top Stories:

WSJ: End to dollar’s 10-year downtrend may be near. – The U.S. dollar is making a comeback that may mark the end of a decade-long downtrend in the currency, said Jens Nordvig, global head of G10 foreign-exchange strategy at Nomura in New York.

The Australian: Aussie dollar near two-year low. – The commodity currency’s month-long slide eclipsed its sudden and dramatic retreat of a year ago when global markets were shaken by a sovereign-debt crisis in Greece, which subsequently engulfed Europe.

New Zealand Herald: NZ dollar falls on fears of further intervention. – The New Zealand dollar fell after Reserve Bank governor Graeme Wheeler said yesterday he is prepared to keep intervening in foreign exchange markets to limit the rise of the local currency. GBP/USD pushes lower after U.S. data. – The pound pushed lower against the U.S. dollar on Friday, as upbeat U.S. data added to expectations for the Federal Reserve to scale down its bond-buying program, sending the greenback broadly higher.

Reuters: Gold falls on dollar recovery, but set for 2nd weekly gain. – Gold fell on Friday, as the dollar extended gains after positive U.S. consumer sentiment data raised uncertainty over the Federal Reserve’s monetary easing, but prices were still on track for their second weekly gain.

MarketPulse FX: USD/JPY falls after Japan deflation continues and industrial output drops. – Japan’s core consumer price index fell 0.4 percent in April from a year earlier, while industrial production also weakened, the government reported Friday.

– The Canadian dollar retraced some of its losses Friday after a slightly better-than-expected release of Canada’s gross domestic product growth in the first quarter of the year improved the outlook for the currency….More at Dollar Boosted By Strong Chicago PMI Data and other Top Forex News.

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