EURUSD entered the North American trading session on a decline, under pressure by weak European PMI data. A slight bounce was seen after better than expected U.S. manufacturing PMI, which helped lift market sentiment. EURUSD bounced off a session low of 1.3277 to climb back up to 1.3369.
The Institute of Supply Management’s index on U.S. manufacturing activity edged up to 53.4 in March, a little better than some analysts expected, giving evidence of economic recovery in the U.S.
Dollar weakened across the board on risk appetite. The ICE dollar index, which measures the dollar performance against a basket of six major currencies, fell to 78.87 from .and earlier high of 79.130.
Sterling held onto gains made in the London session against the dollar, following better-than-expected U.K. manufacturing PMI. The March PMI survey came in at a ten-month high of 52.11 beating forecasts. GBPUSD stayed close to the 4-1/2 month high hit at 1.6062, trading a high of 1.6042 in New York hours.
USDJPY tumbled to a low of 81.86 compared to the early Asian session high of 83.29. Despite a weak Tankan index showing weak business sentiment in Japan, the yen was stronger across the board, mainly due to first day of the new quarter resulting in balancing of positions. EURJPY fell to 108.93 from 111.12 hit in Asia earlier today.
The Canadian dollar rose against its U.S. counterpart amid indications of a stronger economic recovery in the United States, which is Canada’s main trading partner. USDCAD drifted down to 0.9887, from a high of 0.9989. A jump in crude oil prices after the strong U.S. manufacturing PMI helped lift the commodity-linked loonie, as Canada is a major oil exporter. Oil prices jumped over $3 to US$105.46.
Gold rose due to a weaker dollar, the two having an inverse price relationship. Spot gold hit a high of $1,683.13 in New York trading, gaining $20 from the day low.