Euro, sterling strengthen

| May 2, 2006 | 0 Comments

The US dollar was down on Tuesday after new economic data from the UK and the Eurozone provided boosts for the currencies of those nations.

In the UK the manufacturing purchasing managers’ index was up to 54.1 in April after being at 51 in March. The new figure is the highest level the index has reached since November 2004. In addition, mortgage approvals in the UK were at their highest level since June 2004, according to the British Bankers’ Association. The new data, some analysts said, made it less likely that the Bank of England will cut interest rates during the summer and instead might actually spur a rate hike. On the news, sterling added 0.2 percent to £0.6874 in relation to the euro and was up 0.7 percent to ¥208.38 versus the Japanese yen.

The manufacturing purchasing managers’ index in the Eurozone was also up, to 56.7 in April from 56.1 in March, the highest it has been since September 2000. The euro was up 0.4 percent in relation to the yen, to ¥143.26.

The greenback, meanwhile, was down 0.6 percent to $1.2647 versus the euro, lost 0.8 percent to $1.84 in relation to sterling, and dropped 0.2 percent to ¥113.22 versus the yen. The US currency also lost 0.6 percent to C$1.1073 against the Canadian dollar, which was helped by the possibility of future interest rate hikes and rising prices for gold and crude oil.

Elsewhere in the world, the Australian dollar gained 0.6 percent to $0.7626 versus the US dollar and the South Korean won added 0.2 percent against the greenback to Won939.60, an eight-year high.


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