Economic Data Lift Dollar
The greenback was strengthening Wednesday following the release of a new economic report on the services sector that traders viewed favorably.
Euros were selling for $1.412, down from $1.4154 late Tuesday. One dollar was trading for 116.7 Japanese yen, up from 115.8 yen a day earlier. British pounds were trading for $2.036, down from $2.042 previously.
"The inflation and employment components of the ISM nonmanufacturing survey may have been interpreted by some market players as a reason for the Federal Reserve not to ease as much as 50 basis points," explains Joe Brusuelas, chief U.S. economist at IDEAglobal in New York.
The Fed cut the cost of borrowing last month by one-half of 1%, but should the central bank hold firm in the near term, the U.S. currency and domestic assets would look more attractive to investors than they did previously. Traders therefore quickly bid up the value of the greenback after the news was released.In other currencies, the Swiss franc was weakening, with $1 buying CHF1.1799, up from CHF 1.1752 previously. The U.S. dollar was softer against the Australian dollar, buying AU$1.1266 vs. AU$1.131 a day earlier. The PowerShares DB G10 Currency Harvest (DBV), which tracks the values of leading currencies, was rising 0.3% in recent action. The CurrencyShares British Pound Sterling Trust (FXB) was off 0.3%, while the CurrencyShares Euro Trust (FXE) was barely changed. The CurrencyShares Japanese Yen Trust (FXY) was dropping about 0.8%.
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