Dollar Gains Against Peers

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The U.S. dollar was quite firm against other major currencies on Friday thanks to a strong report on U.S. factory activity.

Traders continued to weigh the minutes from the Federal Reserve’s most recent policy meeting that said some members spoke about the need to discuss about tapering the central bank’s asset purchase programs in the upcoming meetings.

Data from Markit Economics showed an expansion in U.S. private sector activity. The IHS Markit US Composite PMI climbed to an all-time high of 68.1 in May, pointing to an unprecedented rate of expansion in the private sector economy as both manufacturing and services expanded at record rates.

The IHS Markit US Manufacturing PMI jumped to a fresh record of 61.5 in May of 2021, beating market forecasts of 60.2 amid stronger client demand, the Markit Economics report said.

A report released by the National Association of Realtors showed existing home sales tumbled by 2.7% to an annual rate of 5.85 million in April after plunging by 3.7% to a rate of 6.01 million in March. Economists had expected existing home sales to surge up by 2%.

The dollar index, which firmed up to 90.15 by early afternoon, pared some gains subsequently, and was last seen at 90.01, up 0.22% from the previous close.

Against the Euro, the dollar strengthened to $1.2182, gaining nearly 0.4% from Thursday’s close of $1.2228. According to flash survey data from IHS Markit, the euro area private sector activity grew the most in more than three years in May as economies continued to open up from virus restrictions. The composite output index rose to 56.9 from 53.8 in the previous month. The score was expected to climb moderately to 55.1.

The Pound Sterling weakened against the dollar, fetching $1.4149 a unit, nearly 0.3% less than the previous close of $1.4189. U.K. retail sales expanded 9.2% month-on-month in April, faster than the 5.1% increase in March and the economists’ forecast of +4.5%.

The Yen turned weak as well against the dollar, easing to 108.95 from 108.78. The manufacturing sector in Japan continued to expand in May, albeit at a slower pace, the latest survey from Markit Economics revealed on Friday with a survey record manufacturing PMI score of 52.5. That’s down from 53.6 in April,

Against the Aussie, the dollar strengthened to 0.7733, gaining 0.55%. The manufacturing sector in Australia continued to expand in May, and at a faster pace. The latest survey from Markit Economics revealed that Australia’s manufacturing PMI came in with a score of 59.9 in the month, up from 59.7 in April.

The Swiss franc firmed up to 0.8979 a dollar from 0.8973, while the Loonie was slightly weak against the dollar at C$1.2068.

The material has been provided by InstaForex Company – www.instaforex.com

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