Dollar rises on solid US economic data

January 16, 2014 | 09:48
(0) user say
The dollar on Wednesday advanced against major currencies after solid US economic data reinforced expectations that the US Federal Reserve will continue to scale back its stimulus programme.

A 20-dollar US bill. (AFP/Mark Wilson)

NEW YORK: The dollar on Wednesday advanced against major currencies after solid US economic data reinforced expectations that the US Federal Reserve will continue to scale back its stimulus programme.

Near 2300 GMT, the euro dipped to $1.3606 from $1.3677 late Tuesday.

The dollar advanced to 104.59 Japanese yen from 104.20.

The euro declined to 142.29 Japanese yen from 142.52.

The dollar also rose against the British pound and the Swiss franc.

Analysts cited a report by the Federal Reserve Bank of New York that showed its general business conditions index of manufacturing activity in New York state reached its highest level in more than a year.

The Labour Department reported that its producer price index rose 0.4 percent, slightly above estimates.

Those two reports came on the heels of better-than-expected data on December retail sales.

"The reports reinforced expectations of steady Fed tapering this year, a narrative with the potential to rouse meaningful dollar gains," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

The euro took a hit after German economic data showed gross domestic product in Europe's biggest economy grew by just 0.4 percent in 2013, down from 0.7 percent a year earlier and the slowest rate since 2009.

"While 2014 is likely to see Germany grow much faster, the overall outlook for the 18-member bloc remains weak," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

"As a result, risks to the euro remain largely biased to the downside."

The British pound fell to $1.6369 from $1.6438.

The dollar advanced to 0.9088 Swiss franc from 0.9022.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional