Thursday, 22 Jul 2010

Positive Market Data Drives EUR Higher; USD Falls

The euro advanced to hit a fresh daily high against the US dollar today, after preliminary data showed that the euro zone's manufacturing and services sectors expanded throughout July.

Earlier in the day, preliminary data compiled by Markit showed that the euro zone's manufacturing purchasing managers' index (PMI) rose to 56.5 in July, after advancing to 55.6 in June. A seperate report showed industrial new orders in the euro zone rose unexpectedly in May, up 3.8% after rising 0.6% in April, whose figure was revised down from 0.9%.

The dollar likewise fell to a weekly low against the yen in Asian trading today as Federal Reserve Board Chairman Ben Bernanke's bearish remarks overnight made investors wary of the direction of the U.S. economy. While he made no mention of changes to the Fed's ultra-easy policy in his semi-annual report to Congress, Bernanke noted the economic outlook is "unusually uncertain," leading to a broad flight from risk.