Forex - Dollar Gains as U.S. Services Activity Hits Highest Since March

Forex - Dollar Gains as U.S. Services Activity Hits Highest Since March

Investing.com  | Jan 24, 2020 19:25

Forex - Dollar Gains as U.S. Services Activity Hits Highest Since March

By Yasin Ebrahim

Investing.com – The dollar climbed against its rivals Friday as data showing ongoing strength in the U.S. services sector offset a continued slowing in manufacturing to a three-year low.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.18% to 97.87.

The IHS Markit flash purchasing managers index for manufacturing slipped to a three-month low in January, but the services PMI rose to the highest level since last March.

Strength in the greenback was also supported by plunge in the pound and euro.

GBP/USD fell 0.29% to $1.308 and more losses could follow when trade negotiations between the U.K. and the EU begin after the U.K. leaves the trading bloc on Jan. 31, said Jane Foley, senior foreign-exchange strategist at Rabobank.

"Once those negotiations get underway in February and March, some of us could be in for a rude awakening," Foley added.

EUR/USD fell 0.20% to $.1013 shrugging off better-than-expected PMIs from Germany amid expectations that the European Central Bank is set to persist with negative rates at least until the end of the year.

USD/JPY fell 0.21% to $109.26 as the yen was supported by an uptick in safe-demand after the CDC confirmed that a second case of the coronavirus had been identified in the U.S.

USD/CAD rose 0.18% to C$1.315 as oil prices continued to retreat on fears that a continued spread of the virus could dent air travel, keeping a lid on oil demand.

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