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© Reuters.
By Peter Nurse
Investing.com – The US dollar lost positions at the start of trading on Wednesday in Europe as the Chinese yuan rose sharply after economic data pointed to a recovery in the world’s second-largest economy, which fueled interest in risky assets.
As of 08:55 AM ET (0855 GMT), the , which tracks the currency against a basket of six other major currencies, was down 0.2% at 104.672.
Data released Wednesday showed China’s manufacturing activity expanded at its fastest pace in more than a decade in February, confirming that China’s economic recovery gained momentum last month after the country eased the most of its anti-COVID measures in January.
China’s stood at 52.6 points in February, which represents a rise compared to the figure of 50.1 in January. The also rose in February, up to 56.3 points, well above the previous month’s reading of 54.4.
Strength in both manufacturing and non-manufacturing activity pushed China’s index up to 56.4 points in February, its fastest pace in more than three years.
The pair is down 0.5% to the 6.9010 level, moving further away from its lows this year, while the is up 0.8% to 0.6233 and the is up 0.5 % to the 0.6760 level; these antipodal currencies are often used as liquid substitutes for the yuan.
For its part, the pair rises 0.4% to the 1.0614 level, driven by interest in risk awaiting the publication of the manufacturing PMIs for the , and .
Inflation data for Germany’s North Rhine-Westphalia region, the country’s industrial heartland, rose on January 1, 1.
This, coupled with higher-than-expected numbers both on and on Tuesday, suggests further interest rate hikes in the coming months.
The pair is also up 0.4% to the 1.2073 level, retaining some strength after rising 1% earlier in the week after the UK reached a trade deal with the European Union on the Northern Ireland issue. after Brexit.
However, the dollar’s losses are likely to be limited, as economic data has tended to paint a picture of a resilient US economy, with a tighter one suggesting further gains from the USD are in store.
“The key data this week will be the Institute for Supply Management surveys and, in particular, Friday’s ISM Service Sector Index, which has served as the benchmark for the rapid swings in confidence in US growth over the past few years. last two reports”, say the ING (AS:) analysts in a note.
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