Dollar pushes higher on positive U.S. manufacturing data

The dollar pushed higher against the other major currencies on Friday, as positive U.S. manufacturing data added to speculation that the Federal Reserve could begin scaling back its bond-buying program sooner than anticipated strengthened the greenback.

During U.S. morning trade, EUR/USD was down 0.71% at 1.3488.

In a report, the Institute of Supply Management rose to 56.4 in October, from a reading of 56.2 the previous month, confounding expectations for a decline to 55.0. 

The report came a day after data showed that manufacturing activity in the Chicago region expanded at the fastest rate in 30 years in October, while a separate report showed that U.S. initial jobless claims fell in line with expectations last week. 

The data fuelled speculation that the Fed may start tapering stimulus sooner than expected, after the central bank sounded more optimistic than anticipated in its assessment of the economy on Wednesday. 

Meanwhile, the single currency remained under pressure after data on Thursday showing that euro zone inflation fell to a four year low in October sparked concerns over the risk of further rate cuts by the European Central Bank.

The greenback was also higher against the pound, with GBP/USD down 0.61% at 1.5939.

Markit research group said the U.K. manufacturing purchasing managers' index fell to 56.0 in October, from a downwardly revised reading of 56.3 the previous month. Analysts had expected the index to tick down to 56.1 last month. 

The dollar was higher against the yen and the Swiss franc, with USD/JPY up 0.48% at 98.83, and with USD/CHF gaining 0.76% at 0.9135. 

In Switzerland, data showed that the SVME PMI fell to 54.2 last month, from a reading of 55.3 in September, confounding expectations for a rise to 55.5.

The dollar was higher against its cousins in Canada, Australia and New Zealand, with USD/CAD adding 0.14% at 1.0446, AUD/USD down 0.08% at 0.9447 and NZD/USD shedding 0.32% at 0.8237. 

Official data earlier showed that producer price inflation in Australia rose 1.3% in the third quarter, exceeding expectations for a 0.7% uptick, after a 0.1% rise in the three months to June. 

In addition, the export-related currencies found support after China's official purchasing managers' index released earlier in the day rose to 51.4 in October, the highest in 18 months, from 51.1 in September. 

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.62% at 80.83.