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Euro drops against U.S. dollar

Euro drops against U.S. dollar

The euro dropped against the dollar Wednesday, even after reports on U.S. manufacturing and services provided new evidence that the economy may be slowing there.
The euro bought US$1.2687 in afternoon European trading, down from US$1.2727 in New York late Tuesday. The British pound slipped to US$1.8834 from US$1.8872, while the dollar was up to 118.02 Japanese yen from 117.89 yen.
The dollar rebounded after slipping against the euro on previous disappointing U.S. economic data.
On Wednesday, the U.S. Commerce Department said that orders to U.S. factories for manufactured goods were little changed in August following a 1 percent decline in July.
Meanwhile, the Institute of Supply Management reported that its gauge of activity in U.S. service industries dropped more than expected in September.
Slowing growth has convinced most economists that the Federal Reserve will hold U.S. interest rates unchanged for the rest of the year.
Rising rates have boosted the dollar for the past two years as the Fed sought to keep growth from fueling inflation. Higher rates can bolster a currency by making certain types of investments more attractive.
Rising interest rates elsewhere also may weigh on the dollar.
The ECB is widely expected to lift its key interest rate when it meets Thursday. It would be the fifth such move since the bank started adjusting rates in December 2005.


Updated : 2021-04-16 20:09 GMT+08:00