FOREX-Dollar gains against the Euro as upbeat US data provides support

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Band Saqib Iqbal Ahmed

NEW YORK, June 1 (Reuters)The U.S. dollar rose against the euro on Wednesday, helped by upbeat U.S. economic data, and as the common currency remained under pressure following the highest inflation on record in the euro zone, prompting concerns about the region’s growth prospects.

The dollar appreciated by around 0.6% against the euro EUR=EBSextending Tuesday’s gains, after data on Wednesday showed U.S. manufacturing activity picked up in May as demand for goods remained strong, which could ease fears of a looming recession.

Positive data from the United States put more pressure on the euro, which suffered losses after Tuesday’s data showed consumer inflation in the eurozone hitting a record high.

“The dollar has risen since the holiday weekend, finding support from rising Treasury yields as others sought protection from worsening global inflation,” said analyst Joe Manimbo. senior market at Western Union Business Solutions.

Hopes that inflation has peaked are challenged by oil prices, which have just recorded their sixth straight month of gains, the longest such streak since 2011.

“Holding oil at high levels above $115 does not inspire confidence that inflation is at or near a peak,” Manimbo said.

News that European Union leaders agreed in principle on Monday to cut most oil imports from Russia by the end of this year is the latest boost to rising oil prices.

“I think we will continue to work a bit while we wait for more inflation data around the world and news on Russia / Ukraine, commodities and the reopening of China,” said Brad Bechtel , global head of foreign exchange at Jefferies. a note to customers.

Elsewhere, the Australian dollar rose 0.1% after data showed the country’s economy held up better than expected in the first quarter, with strong domestic demand offsetting a slowdown in gloomy weather and a flood of imports, paving the way for more interest rate hikes to fight inflation. .

The Canadian dollar CAD= strengthened to its highest level in nearly six weeks against the greenback after the Bank of Canada raised its key rate from 1.0% to 1.5% on Wednesday, its second consecutive hike of 50 basis points. He also said he was ready to act “more forcefully if necessary” to bring inflation back to its target.

The pound fell 0.76% as investors worried about a deteriorating growth outlook after data showed UK manufacturing activity grew in May at the weakest rate since January 2021.

In cryptocurrencies, bitcoin BTC=BTSP was roughly flat at $31,562.75, struggling to advance further after 4 consecutive sessions of gains.

Global exchange rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Saqib Iqbal Ahmed; Editing by Hugh Lawson)

(([email protected]; @SaqibReports; +1 646 223 6054; Reuters Messaging: [email protected]))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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