Forexpros – The dollar regained strength in Asian trading on Monday after dropping on news that Chinese factory sector figures surprised on the upside, as bargain hunters jumped in and brought the greenback back up in edgy trading, with the market awaiting key U.S. manufacturing data.
The euro firmed against the dollar in Asian trading Monday before paring some gains, with EUR/USD rising 0.01% and trading at 1.3342.
The China Federation of Logistics and Purchasing reported that its purchasing managers index rose 2.1 points to 53.1 in March, up from February’s 51.0 and January’s 50.5, according to the Associated Press, outpacing market expectations.
The news sparked an early-session dollar selloff as investors snapped up stocks and other currencies with increased appetite for risk.
Data out of the U.S. last week continued to boost demand for risk in Asia on Monday.
In the U.S. late last week, the Thomson Reuters/University of Michigan’s consumer sentiment index for March rose to 76.2, the highest since February 2011, from 75.3 in last month, outpacing analysts’ expectations.
The Commerce Department, meanwhile, reported that personal spending rose 0.8% in February, the most in seven months and above expectations for a 0.6% gain.
The European debt crisis on the sidelines as well.
Eurozone ministers agreed last week to boost the bloc’s bailout lending ceiling to EUR800 billion to halt the threat of sovereign debt contagion spreading to larger economies such as Italy and Spain.
The firewall will rely on EUR500 billion from the European Stability Mechanism, which takes effect in July, another EUR200 billion already committed in loans to Greece, Ireland and Portugal and EUR100 billion in bilateral loans and European Union funds.
The risk-on trading session tempered a bit, as investors snapped up nicely priced dollar positions, buying and selling in choppy trading ahead of Monday’s release of the Institute of Supply Management’s Manufacturing Purchasing Managers Index.
Furthermore, Japan’s Tankan manufacturing index remained unchanged unexpectedly at a seasonally adjusted -4 in the first quarter of 2012 from -4 in the fourth quarter of 2011, which prompted some investors to restock dollar positions.
The greenback, meanwhile, was up against the pound, with GBP/USD down 0.09% and trading at 1.5994.
The greenback was up against the yen, with USD/JPY trading up 0.40% at 83.20, and up against the Swiss franc, with USD/CHF trading up 0.04% at 0.9027.
The greenback was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.14% at 0.9970, AUD/USD up 0.70% at 1.0421 and NZD/USD up 0.31% at 0.8210.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.06% at 79.16.
On Monday in the U.S., the Institute of Supply Management will release its Manufacturing Purchasing Managers Index, which will serve as the dollar’s chief homegrown steering current.
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