The dollar(NYBOT:USDH14) rose to a one-week high as traders looked past weaker-than-forecast U.S. economic reports that may have been distorted by winter storms.
The U.S. currency gained on speculation the Federal Reserve will continue to reduce monetary stimulus even as a gauge of business in the Philadelphia region unexpectedly fell this month and weekly jobless claims were higher than estimated. The euro fell as measures of European services and manufacturing both dropped, while the yen rose versus most peers on haven demand after a weaker-than-projected report on Chinese manufacturing added to concern the world’s second-biggest economy is slowing. Brazil’s real increased the most among major currencies as the government cut spending to meet a budget target.
“Despite the weak data, the foreign-exchange market is not in a panic,” Greg Anderson, head of global foreign-exchange strategy in New York at Bank of Montreal, said in a phone interview. “By weak data, I’m not just talking about the U.S. Philly Fed, but Chinese data, euro-zone data, both disappointing.”
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major counterparts, advanced 0.1 percent to 1,021.44 at 1:37 p.m. in New York, after reaching 1,021.98, the highest level since Feb. 13.
The yen was little changed at 102.36 per dollar after rising 0.1 percent yesterday. Japan’s currency climbed 0.2 percent to 140.30 per euro after depreciating to 141.03 on Feb. 18, the weakest level since Jan. 29. The euro dropped 0.2 percent to $1.3706.
Brazil’s currency strengthened on easing concern that fiscal deterioration will lead to a lowered credit rating. The real appreciated 1 percent to 2.3706 per U.S. dollar.
The yuan tumbled the most in two years in offshore trading as China’s central bank cut its fixing for the currency to this year’s low and data indicated manufacturing is shrinking faster than economists forecast.
The currency sank 0.39 percent, the most since January 2012, to 6.0738 per dollar.
HSBC Holdings Plc and Markit Economics said their index of Chinese manufacturing fell to 48.3 from January’s final figure of 49.5. A number below 50 indicates contraction. Slowing output increases pressure on policy makers to support economic expansion that’s forecast to slide to a 24-year low of 7.4 percent in 2014.