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The US dollar fell on Thursday, pushed down by the gains of the euro after robust data from the German manufacturing sector hinted that economic activity in the monetary union of 19 nations could bounce back.
the US currency against a basket of 16 others, decreased by 0.1% to 87.94. The greenback fell 0.5% against the euro
The euro rose after the German Ministry of Economy announced Thursday that total manufacturing orders had risen by 2.6% in April. Economists surveyed by the Wall Street Journal predicted a gain of 1.1%
"The rebound is a very important thing here," said Alvise Marino, currency strategist at Credit Suisse Group AG
. Bet that the euro would continue to win against the dollar after rising 14% last year. Instead, the euro fell 2.9% against the US dollar. The sluggish growth of the region has forced the European Central Bank to move its monetary policy towards pre-crisis norms, indicating when it could arouse interest. At the same time, the dollar rebounded as a dynamic US economy led the Federal Reserve to bring the number of interest rate hikes projected this year to four out of three. Higher interest rates generally attract investors to a currency
Many investors expected the European economy to start showing signs of recovery in the second quarter, and the data German factories indicate that the euro has stabilized against the dollar. Marino said:
The euro is also backed by reports that ECB officials have discussed the possibility for the central bank to raise rates before the end of 2019. The ease of filing the BCE is currently -0.40%. want to keep their policy options open "so that they are not too much in a corner," said Mr. Marino.
Write to Daniel Kruger at [email protected]
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