Dollar broadly lower as U.S. data eyed

The dollar was broadly lower against the other main currencies on Thursday on expectations that the Federal Reserve will hold off on tapering stimulus until next year, as investors looked ahead to U.S. data due later in the trading day.

During European morning trade, the dollar was trading at 23-month lows against the euro, with EUR/USD up 0.20% to 1.3804.

The euro briefly trimmed gains after data released on Thursday showed that manufacturing activity in the euro zone expanded at a slower than expected rate in October, indicating that the recovery remains sluggish.

The preliminary reading of the euro zone’s manufacturing purchasing managers’ index ticked up to 51.3 in October from a final reading of 51.1 in September, slightly below expectations for a reading of 51.4. 

The euro zone services PMI fell to 50.9 this month from 52.2 in September.

The dollar was almost unchanged near two-week lows against the yen, with USD/JPY dipping 0.05% to 97.34.

The dollar briefly touched session highs against the yen earlier after data showed that manufacturing activity in China expanded at the fastest rate in seven months in October.

The data helped offset fears over the Chinese economy, a day after market sentiment was hit by concerns that China’s central bank would tighten monetary policy to help control inflation.

The dollar fell to fresh 20-month lows against the traditional safe haven Swiss franc, with USD/CHF down 0.20% to 0.8906 and was also lower against the pound, with GBP/USD rising 0.14% to 1.6184.

The dollar remained under pressure after data earlier in the week showing that U.S. jobs growth slowed in September cemented expectations that the U.S. central bank would continue the current pace of its asset purchase program well into next year.

The greenback was mixed against its Australian and New Zealand counterparts, with AUD/USD inching up 0.07% to 0.9628 and NZD/USDdown 0.33% to 0.8363. 

The greenback pushed higher against the Canadian dollar, withUSD/CAD easing up 0.12% to 1.0397.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell to an eight month low, slipping 0.15% to 79.23. 

Investors were looking ahead to U.S. data on initial jobless claims, the trade balance and new home sales later in the trading day.