News Column

Dollar Back In Style As Europe Flounders

September 2, 2014

WASHINGTON (Alliance News) - The dollar continued to strengthen Tuesday, adding to multi-month highs versus major rivals amid further signs the US economy is picking up.

Meanwhile in Europe, the threat of deflation and stagnant economic growth will probably compel the European Central Bank to offer monetary stimulus on Thursday.

Early gains took the dollar to USD1.3120 versus the euro amid the release of data showing euro zone producer prices resumed their decline in July.

The prices of goods from euro zone factories fell 0.1% from June, and were down 1.1% from July 2014.

The dollar touched its highest in five months against the sterling, touching USD1.6480 after polls showed a referendum on Scottish independence will be tight.

UK manufacturing activity grew at the slowest rate in 14 months in August, the Markit/Cips UK Manufacturing Purchasing Managers' Index (PMI) showed.

The buck approached its 2014 highs versus the yen, rising to Y105.20.

In economic news from the US, activity in the manufacturing sector unexpectedly grew at an accelerated rate in the month of August, according to a report released by the Institute for Supply Management on Tuesday, with the index of activity in the sector climbing to a three-year high.

The ISM said its purchasing managers index climbed to 59.0 in August from 57.1 in July, with a reading above 50 indicating growth in the manufacturing sector.

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Source: Alliance News

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