Dollar Perks Up on Manufacturing Data

The U.S. dollar strengthened against the other major currencies Monday as bullish U.S. manufacturing data coupled with gains in the stock market and higher Treasury yields offset selling pressure tied to a mass shooting in Las Vegas. The euro struggled in response to developments in Spain over the weekend that plunged the country into political chaos, while cable continued to lose ground, closing the North American session in the red for the sixth time in seven days, losing nearly another 1%.

USD/JPY peaked at 113.00 during the early hours of European trade and started drifting lower ahead of the North American open with 50% Fibonacci retracement of the June 2015 high and June 2016 low at 112.50 keeping the dollar protected from further downside pressure. A spike back to 113.00 followed the PMI manufacturing index at 9:45am ET. But the dollar retreated back toward 112.50 before staging another attempt higher, settling into a range at 112.50 to 112.65 into the U.S. close, a fractional gain from Friday’s close.

Overnight, the EUR/USD fell below its 50- and 100-hour moving averages for the first time in more than a week as the protests in Spain following the Catalonian independence vote turned violent. Amplified by a miss on the EU manufacturing PMI, the euro flirted with the Sept 27 low settling at 1.1740, its lowest close since August 17.

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