The dollar strengthened considerably higher against most of its peers today following the release of upbeat US factory orders data as Friday’s series of data further underpinned the greenback. US factory orders increased after an 8 month lull jumping 2.1% in March while experts forecast an increase of 2.0% following a decrease of 0.1% in February. Recent US data has supported outlook that the economy is rebounding fueling renewed optimism and predictions for a Fed rate increase.

The euro weakened against the dollar with the pair falling over 0.5% following the release of data which revealed that manufacturing activity in the euro zone declined in April although economic recovery remains on its current trajectory to improve. The euro zone’s manufacturing PMI for April posted a reading of 52.0 which was just shy of its 10 month high of 52.2 posted in March. German manufacturing dropped from its 11 month high of 52.8 in March to 52.1 in April while output for France declined for the 12th consecutive month. The pair reached a session low of 1.1122.

The pound weakened against the dollar with the pair hitting a session low of 1.5089 on thin volume with UK markets closed and as dollar demand increased. Investors await the results of upcoming UK elections which could adversely affect growth in the economy. The pound was stronger against the euro with the pair declining around 0.5%.

The yen held its ground to weaker against the dollar with the pair trading near its session high of 120.27 within its usual tight range today of less than 1 big figure. Despite being range bound the pair was able to rally roughly 200 pips during the last 48 hours of last week to reach its 3 week high set today. The pair seems ready for a breakout soon pushing past its 7.5 year high around 122. As Japan reopens on Wednesday following Golden Week volume and volatility could be subdued until then.

The Australian and New Zealand dollars held their ground against the greenback. The Aussie dollar was supported by data released by the Australian Bureau of Statistics which revealed that building approvals jumped by 2.8% in March ahead of forecasts for a 2.0% decrease. Figures also revealed that Australian job advertisements were up by 2.3% in April following a 1.3% decrease in March.

These export associated currencies had their advances curtailed after China’s HSBC manufacturing purchasing managers’ index dropped from 49.2 in March to 48.9 in April compounding forecasts for an increase to 49.4. The data pointed to a possible drawdown in growth for the world’s second largest economy. The Canadian dollar strengthened against the greenback with the pair down over 0.5% trading near its session low 1.2089. The loonie’s advances were curtailed as the greenback maintained support.

Disclaimer: This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.