US dollar steadies after upbeat data amid holiday-thin trade

Strong US economic data helped push the greenback to a stronger position against a basket of currencies. — Reuters pic
Strong US economic data helped push the greenback to a stronger position against a basket of currencies. — Reuters pic

TOKYO, April 19 — The US dollar steadied against a basket of currencies today after hitting a 2-1/2-week high overnight as data pointed to a sturdy US economy, while the euro was dented by weak manufacturing activity in Europe.

Many financial markets were closed for the Good Friday Easter holiday. Currency markets remain open but volume is expected to be light.

The US dollar index, which measures the greenback against a basket of six other major currencies, rose to as high as 97.485 overnight, its highest level since April 2. It last traded at 97.392 today, down 0.1 per cent on the day.

US retail sales increased by the most in 1-1/2-years in March as households boosted purchases of motor vehicles and a range of other goods, the latest indication that economic growth picked up in the first quarter after a false start.

The economy's strength was reinforced by other data yesterday showing the number of Americans filing applications for unemployment benefits dropped to the lowest in nearly 50 years last week.

“In addition to the recent upticks in Chinese data, the latest US retail sales numbers have helped to ease investor worries about the global economy. It's pretty quiet trading due to the Easter holiday, though,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

The picture was less bullish in the euro zone as data yesterday showed that activity in Germany's manufacturing sector shrank for a fourth straight month in April.

The euro fell against the US dollar to as low as 1.1226, its lowest level in 1-1/2 weeks, after the worse-than-expected data from the Europe's largest economy.

The single currency was last up 0.1 per cent against the US dollar at $1.1242, up 0.1 per cent on the day.

In contrast, the weak European data pushed the yen higher to its one-week high of 111.765 yen at one point on late yesterday. The yen last stood at 111.935 yen to the US dollar, within the recent narrow range.

The release of Special Counsel Robert Mueller's report on Russia's role in the 2016 US election had little impact on markets. — Reuters

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