EUR/USD touches 1.38 Again as Manufacturing Expands

The euro rose against the dollar as a survey of purchasing managers showed manufacturing and services output in the region expanded at a faster pace this month than economists forecast.

The dollar dropped against most of its 16 major peers as futures traders bet the Federal Reserve will keep interest rates at almost zero through next year even amid speculation it would cut bond-buying this week. The Norwegian krone rallied as the trade surplus widened, and China’s yuan forwards halted a three-day decline. A measure of Group of Seven currencies volatility slipped from almost a 10-week high.

“The composite PMI was better than expected, but looking at the fine prints, Germany is looking stronger, but the rest of the Europe isn’t,” Brian Daingerfield, a Stamford, Connecticut-based currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit, said in a phone interview. “You can see a bit of the strength in euro that has given way here.”

Bloomberg

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