Jump in manufacturing index sends dollar higher

AP News
Posted: May 01, 2012 4:35 PM
Jump in manufacturing index sends dollar higher

An unexpected rise in a gauge of U.S. manufacturing pushed the dollar higher against most major currencies Tuesday.

The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to 54.8 in April. That's the highest reading since June and up from 53.4 the previous month.

In a separate report, the Commerce Department said construction spending rose 0.1 percent in March after two straight months of declines.

The euro fell to $1.3228 in afternoon trading Tuesday from $1.3243 late Monday.

The U.S. currency also rose sharply against the Australian dollar after the Reserve Bank of Australia cut its benchmark interest rate by half a percentage point. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it.

In other trading, the British pound fell to $1.6220 from $1.6232. The dollar rose to 80.21 Japanese yen from 79.81 yen and to 0.9079 Swiss franc from 0.9073 Swiss franc. But the dollar fell to 98.52 Canadian cents from 98.73 Canadian cents.