2 May 2001, 16:02 US FX Daily Outlook: Dollar rises amid soft euro zone data
By Cornelius Luca
New York, May 2 (BridgeNews) - The greenback advanced modestly across
the board on flows and with help from a weak euro zone's April purchasing
managers' index for the manufacturing sector, which dropped to 49.3 from
51.2 in March.
The euro fell from a five-day high of 89.47 cents, while the dollar
reversed losses from an eight-day low of 121.55.
* * *
The dollar was also underpinned by the passage of a $1.35 trillion
11-year tax cut plan in the U.S. overnight and from reports that Germany
is backing away from an EU corporate takeover code.
Dollar/Swiss franc bounced from a four-day low but remained within
Friday's range and sterling/dollar fell from a two-day high of 1.4374.
Meanwhile, dollar/Canada took another step toward 1.5258, the target of a
head-and-shoulders pattern, as it sank to a fresh two-month low of 1.5288.
The euro area PMI, which declined to a 26 month low, was dragged
down by new orders and to a lesser extent output. The decline in the price
indices suggests reduced inflationary pressures. On a positive note, the
employment indices were relatively stable in April, remaining above 50,
suggesting that employment continued to expand. However, employment
usually lags changes in output.
The overnight activity has been fairly limited as many Japanese
traders remained sidelined during the string of Golden Week holidays and
the Continental European traders returned from a long weekend.
Market participants will be faced with speeches by Federal Reserve
Gov. Laurence Meyer and San Francisco Federal Reserve Bank President
Robert Parry.
Traders will likely keep the major pairs in good two-way traffic, with
a bias toward a firm dollar.
Current Previous Change Global Global
NY open NY close low high
USD/JPY 122.02 121.96 0.06 121.55 122.22
EUR/USD 0.8911 0.8932 -0.0021 0.8885 0.8947
EUR/JPY 108.73 108.95 -0.22 108.18 109.34
GBP/USD 1.4307 1.4342 -0.0035 1.4298 1.4374
USD/CHF 1.7297 1.7262 0.0035 1.7240 1.7348
USD/CAD 1.5304 1.5326 -0.0022 1.5288 1.5330
AUD/USD 0.5187 0.5172 0.0015 0.5170 0.5212
NZD/USD 0.4209 0.4184 0.0025 0.4183 0.4235
SP.1 1270.00 -2.50 1266.50 1275.00
ND.1 1941.00 0.50 1915.00 1958.50
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