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Euro slips against U.S. dollar, backing further from all-time high

Euro slips against U.S. dollar, backing further from all-time high

The euro fell further against the U.S. dollar on Wednesday after U.S manufacturing activity showed surprising strength in April and unemployment fell at a slower pace in Germany.
In early European trading, the euro bought US$1.3569 _ down from the all-time peak of $1.3682 it hit Friday and less than the $1.3600 it fetched in late trading Tuesday in New York.
The British pound fell slightly to $1.9903 from $1.9987 in late trading Tuesday. It had hit $2.0010 earlier on Tuesday.
In Germany, unemployment slipped to 9.5 percent, its lowest level since October 2002, but declined at a slower pace, a move analysts said was not to be fretted about.
"Mild winter weather and a new incentive to keep construction workers and roofers off the dole during the cold season had led to fewer seasonal layoffs in the winter months than before," said Holger Schmieding, Bank of America's chief economist for Europe. "Therefore, fewer construction workers than usual need to be rehired this spring. Due to the seasonal adjustment, this shows up as a subdued labor market performance in April."
The dollar was helped after the ISM's manufacturing index registered 54.7 Tuesday, beating the March reading of 50.9 and Wall Street's forecast of 51. A reading above 50 indicates growth for the sector, while a reading below 50 indicates contraction.
The news supported the dollar, as it lessens the likelihood that the Federal Reserve will lower interest rates to encourage spending _ especially as costs rise.
Lower interest rates, which can jump-start an economy, can also weaken a currency by subtracting from the returns on some investments.
The dollar rose slightly against the yen amid thin activity over Japan's Golden Week holidays. It bought 120.21, up from 119.75 yen late Monday.


Updated : 2021-06-16 06:05 GMT+08:00