US Dollar Stays Lower on Lackluster Manufacturing Data

The US dollar remained weaker against the euro on Thursday as traders digested a disappointing report on manufacturing activity in the Philadelphia region, which was released earlier today. However, an index that tracks the strength of the greenback rose as the US currency improved against a number of its major peers.

The report, which was published by the Federal Reserve Bank of Philadelphia, said that manufacturing activity in the bank’s region continued to expand in April. An index for manufacturing activity was at 22.0 in the current month, from 32.8 in March, which reflected a slowdown in the expansion rate of manufacturing activity even as manufacturing remained strong. The reading in April marks the ninth month in a row of positive readings, however the report still disappointed expectations for a reading of 25.0.
The index was dragged down by weaker shipments and fewer new orders, as two indexes that track each separately declined 10 and 11 points, respectively. The report added that 15% of the firms that were surveyed to get a reading for manufacturing performance in the region reported a decrease in activity in April. The dollar remained weaker as traders became concerned that economic data may not offer the US currency enough support in the short term.
A separate report from the US Department of Labor said that initial jobless claims rose 10,000 to 244,000 in the week ended April 15, which was bigger than an anticipated increase to 242,000. But the moving average of jobless claims for four weeks was at 243,000, which is 4,250 applications less than the previous week.
Growing geopolitical tensions have forced traders to turn to economic data and corporate earnings in search for support for the US dollar. The market now awaits tomorrow’s economic releases, which include a new reading for the manufacturing purchasing managers’ index and existing home sales data, to find hints on the strength of the US economy.
EUR/USD was at 1.0714 as of 23:55 GMT on Thursday to remain at the same level it began the day at, after touching 1.0775 at 09:30 GMT, the pair’s highest level since March 30. USD/JPY moved to 109.37, after rising to 109.44 at 16:05 GMT, a level last seen on April 12. USD/JPY started trading today at 108.82.
The Dollar Index, which measures the strength of the US currency against its major counterparts, was at 99.85 at 23:54 GMT today, from 99.73 yesterday.

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