Dollar gains on euro as new year opens

January 03, 2014 | 09:06

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The dollar rose against the euro Thursday as investors pushed back into the greenback and sent US bond yields lower.

US dollar and Euro bank notes

NEW YORK: The dollar rose against the euro Thursday as investors pushed back into the greenback and sent US bond yields lower.

At 2200 GMT, the euro was at US$1.3665, compared with US$1.3753 on Tuesday, before the New Year's Day holiday.

The Japanese yen gained on both, with the dollar buying 104.69 yen compared with 105.33, and the euro slipping to 143.06 yen from 144.89.

The dollar buying sent US bond prices higher. The yield on the 10-year US Treasury fell to 2.99 per cent from 3.03 per cent.

US economic data gave little push to the market: the ISM manufacturing index for December was slightly lower; new unemployment insurance applications fell slightly last week; and construction spending pushed higher in November.

In the eurozone, manufacturing activity showed its best growth in 31 months in December, according to the Markit index.

In China, by comparison, the HSBC manufacturing index showed the slowest pace of growth in three months.

"Both the euro and Swiss franc have been hit hard by the slowdown in Chinese manufacturing activity," said Kathy Lien at BK Asset Management.

"The unevenness of the (eurozone) recovery is one of the main reasons why we expect the euro to underperform the dollar this year. US$1.35 is now in sight," she said.

The British pound slipped to US$1.6444 from US$1.6570, while the dollar rose to 0.8991 Swiss franc from 0.8922.

AFP

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