Euro Strengthens as Manufacturing Rises

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Tradervox.com (Dublin) - The 17-nation currency strengthened from its lowest level in six weeks against the greenback after a report showed manufacturing in the currency bloc expanded for a fourth month in October. The euro advanced for the first time in three days versus the yen amid speculation the European Central Bank will refrain from cutting interest rates at a meeting this week. Australia’s dollar rose versus all its 16 major counterparts after retail sales increased before the Reserve Bank reviews borrowing costs tomorrow. The pound climbed from a two-week low versus the dollar after U.K. construction output expanded.

According to Sebastien Galy, a New York-based senior foreign-exchange strategist at Societe Generale SA, in the short term, there will be pull higher, especially if the ECB does not give a decision to cut rates. He predicted that the ECB may be signaling a dovish message but it will not cut rates at their meeting this month, but they might do so in the next meeting.

The euro was little changed at $1.3493 at 9:05 a.m. New York time after falling to $1.3442, the weakest level since Sept. 18. The common currency gained 0.1 percent to 133.15 yen after sliding 1.7 percent during the previous two days. The dollar was little changed at 98.67 yen.

The Australian dollar gained for the first time in three days after the Bureau of Statistics said retail sales rose 0.8 percent in September, compared with the median forecast of 0.4 percent in a survey. Australia’s dollar jumped 0.6 percent to 94.98 U.S. cents after falling to 94.22 cents on Nov. 1, the weakest level since Oct. 14.

The pound rose 0.3 percent to $1.5957 after falling to $1.5904, the lowest level since Oct. 16. The U.K. currency gained 0.1 percent to 84.56 pence per euro.

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