The dollar extended gains against the other major currencies in the US session, after being boosted by data showing U.S. manufacturing picked up in May, adding to evidence that the world’s largest economy is strengthening.
The U.S. Commerce Department said factory orders increased by a seasonally adjusted 2.1 percent, beating forecasts for an increase of 2 percent.
Focus now turns to the key jobs report on Friday, the closely watched nonfarm payrolls report. Expectations are that the data should reinforce the idea that the U.S. labour market is slowly on the mend.
An improvement in job creation will lead to more clues on when the Federal Reserve may decide to unwind its current stimulus program which involves $85 billion-a-month in bond purchases.
After today’s U.S. factory orders report, the dollar surged against the yen to hit a new four-week high. USDJPY advanced 1 percent on the day to break the key 100 yen level and hit a high of 100.71 yen.
The dollar also gained against the euro, investors shied away from the single currency ahead of key risk event on Thursday when the European Central Bank holds it monthly policy meeting.
The ECB is expected to reiterate that an exit from loose monetary policy remains distant. This contrasts with the Fed which is planning to taper stimulus by this Autumn.
EURUSD broke the key $1.30 level and is down 0.7 percent on the day to $1.2962.
The dollar was also stronger versus sterling, with GBPUSD slipping to $1.5135 as demand for the pound falls ahead of the Bank of England policy meeting on Thursday.
The dollar extended gains against the other major currencies in the US session, after being boosted by data showing U.S. manufacturing picked up in May, adding to evidence that the world’s largest economy is strengthening.
The U.S. Commerce Department said factory orders increased by a seasonally adjusted 2.1 percent, beating forecasts for an increase of 2 percent.
Focus now turns to the key jobs report on Friday, the closely watched nonfarm payrolls report. Expectations are that the data should reinforce the idea that the U.S. labour market is slowly on the mend.
An improvement in job creation will lead to more clues on when the Federal Reserve may decide to unwind its current stimulus program which involves $85 billion-a-month in bond purchases.
After today’s U.S. factory orders report, the dollar surged against the yen to hit a new four-week high. USDJPY advanced 1 percent on the day to break the key 100 yen level and hit a high of 100.71 yen.
The dollar also gained against the euro, investors shied away from the single currency ahead of key risk event on Thursday when the European Central Bank holds it monthly policy meeting.
The ECB is expected to reiterate that an exit from loose monetary policy remains distant. This contrasts with the Fed which is planning to taper stimulus by this Autumn.
EURUSD broke the key $1.30 level and is down 0.7 percent on the day to $1.2962.
The dollar was also stronger versus sterling, with GBPUSD slipping to $1.5135 as demand for the pound falls ahead of the Bank of England policy meeting on Thursday.
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