RTTNews - The dollar firmed up versus most majors Tuesday morning in New York, extending its run of choppy dealing after a mixed bag of economic data from across the Atlantic fueled risk aversion.
The safe haven dollar has bounced back and forth over the past few weeks, with traders expressing little conviction the global economy is on the mend. Stocks have leveled off after a strong summer rally, giving the dollar some added support.
While certain sectors of the economy may be showing signs of life, the job situation remains grim. The most important economic report of the unfolding week will be the Labor Department's non-farm payroll employment report for August, which is due out on Friday.
The dollar improve to 1.4300 versus the euro, having managed to fall no further than its 2009 low of 1.4446 set almost a month ago.
The dollar raced higher versus the sterling, taking back its losses from the previous session. The buck rose to 1.6220, but ran out of steam approaching mid-morning.
Eurostat said in a report that Eurozone jobless rate stood at 9.5% in July, up from 9.4% in the previous month. This was the highest jobless rate since May 1999.
A key indicator for Eurozone manufacturing activity increased to a 14-month high in August, rising more than initially estimated, a report by Markit Economics said on Tuesday. However, the sector continued to contract, though at a slower pace.
UK manufacturing sector unexpectedly shrunk in August, a key survey by the Chartered Institute of Purchasing and Supply and Markit Economics reported.
Versus the yen, the dollar inched slightly higher to 93.15, pausing from its recent downtrend. Over the weekend, an election win by the Democratic Party of Japan ended a half-century of almost unbroken rule by the Liberal Democratic Party.
Looking at the economic calendar for Tuesday, the Institute of Supply Management will release the results of manufacturing survey for August at 10.00 am ET. Economists expect the index to show a reading of 50.2 for the month.
The Commerce Department will be releasing the construction spending report for July. Economists expect a modest 0.2% drop in construction spending report for July amid increasing confidence that the worst for the economy is over.
Traders will also digest data on pending home sales for the month of July, to be released by the National Association of Realtors, at 10.00 am ET. Following a 3.6% rise in pending home sales for June, economists now expect a moderate 0.6% rise in pending home sales data for July.
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