The euro pushed higher against the dollar yesterday in choppy trading, even as disappointing US economic data weakened stocks.
- The single currency made strong gains yesterday morning, supported by the results of the ECB cash tender offer.
- The volume of bids was lower than expected, which implied that financial conditions in the eurozone were improving and there may be less need for the ECB to inject money into the market.
- Additionally, German unemployment fell again in September and even after seasonal adjustments, the number of jobless fell by 12,000, resulting in an overall dip in the unemployment rate to 8.2%, which buoyed demand for the single currency.
- In the afternoon however, the single currency trimmed its gains as investors checked their risk activities following a worse-than-expected change in ADP non-farm employment in the US.
- There was also negative manufacturing data from the Chicago area, although analysts noted that data from this region has been volatile and generally erratic recently, which prevented the dollar from garnering too much support.