The dollar edged higher on Wednesday, a day after weak U.S. manufacturing data knocked the greenback off two-year highs, while the British pound fell back towards one-month lows amid fresh Brexit uncertainty.
Data on Tuesday showed that the U.S. manufacturing sector contracted in September to its weakest level in more than a decade as business conditions deteriorated further amid the trade war between the U.S. and China.
Analysts, however, said the setback for the dollar will likely prove temporary given its higher yield versus peers and the relative strength of the U.S. economy - non-farm payrolls data due on Friday should give some more insight into the health of the U.S. economy.
Hewson said weakness in U.S. manufacturing would have to spill over into the services sector before it had a significant impact on monetary policy and the outlook for the dollar.
The U.S. dollar index was 0.1% higher at 98.95 by 4:11 AM ET (8:11GMT) after rising as high as 99.667 on Tuesday, a 29-month peak, before the manufacturing data was released. The pound was down 0.2% to 1.2276, not far from an almost one-month low plumbed overnight.
Source : Investing.com