A raft of better-than-expected European data and optimism that the U.S. and China can forge a trade deal soon helped to buoy assets perceived as risky, while weighing on the U.S. dollar on Wednesday.
After trading near a 16-month low on Tuesday, the euro rose toward $1.1250 after stronger-than-expected eurozone purchasing managers index readings, momentarily quelling anxieties of rapidly deteriorating economic expansion in Europe.
“Consequently, this has eased some concerns that the weakness in the manufacturing sector is spreading to the whole economy, given the pick up in the services data,” wrote Justin McQueen, markets analyst at Daily FX.
was last changing hands at $1.1245 compared with $1.1208 late Tuesday.
The Financial Times reported late Tuesday that a trade deal between the U.S. and China is all but done. “Ninety percent of the deal is done, but the last 10% is the hardest part, it’s the trickiest part and it will require trade-offs on both sides,” Myron Brilliant, executive v.p. for international affairs at the U.S. Chamber of Commerce.
Despite the optimism, stock indexes pared some early session gains with the Dow Jones Industrial Average
slipping into negative territory in midafternoon trade, while the S&P 500
and Nasdaq Composite
both traded off session highs.
The ICE U.S. Dollar Index,
a measure of the greenback versus six of its nearest rivals, fell 0.3% to 97.07.
Across the pond, the British pound
is attempting to log its third consecutive winning session as fears of a full-blown hard Brexit eased after Prime Minister Theresa May met with Labour leader Jeremy Corbyn in a bid to break the Brexit deadlock.
Corbyn said the talks with May were “useful but inconclusive,” but added, “there has not been as much change as I expected.”
The pound was last at $1.3162, compared with $1.3131 yesterday.
Elsewhere, the Japanese yen
was weaker versus the buck with one dollar last buying ¥111.48.
Economic data out of the U.S. fell short of expectations on Wednesday. Payroll processor Automatic Data Processing Inc. said the private sector added 129,000 workers in March, the lowest in 18 months and below market consensus. And the March Institute for Supply Management nonmanufacturing index, or services, fell to 56.1 from 59.1, below economists polled by MarketWatch. A reading of at least 50 denotes improving conditions.
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