According to yesterday’s reports, U.S. Manufacturing contracted for the first time since the nation came out of a recession three years ago. This seems to suggest that a main sector of the country’s economy is faltering –a factor that raised demand for safety and benefitted the U.S. Dollar against the Euro.
The Euro reversed its biggest advance versus the Yen in close to one and half years on reports showing that the Euro-zone’s Unemployment rate reached a record high. The Yen rallied versus the majority of its foreign currency peers following a release from the Institute for Supply Management which confirmed that the U.S. Factory Index shrunk for the first time in close to 36 months.
Other day trading news showed that the British Pound gained against the Euro since investors perceived the Sterling as a safer investment on worries that last week’s agreements aimed at helping the debt markets will be thwarted. The British Pound advanced the most in two weeks versus the Euro currency after Finland and the Netherlands indicated that they’re against the idea of allowing the European Stability Mechanism to buy bonds in a secondary market. The British currency strengthened after Prime Minister David Cameron stated that he didn’t oppose a popular vote to decide whether the U.K. should join the European Union.
Lastly, the Australian Dollar inched closer to a two-month high on speculation the central bank will leave the interest rate unchanged.