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Thursday, February 02, 2012

Euro Rises Versus U.S. Dollar as Manufacturing Data Outpace Estimates

The euro rose against the dollar for the first time in three days as a purchasing managers’ index of manufacturing output in the region beat analysts’ estimates, adding to signs Europe’s economy is stabilizing.

The greenback fell versus 13 of its 16 most-traded peers after manufacturing in China and the U.S. also rose, damping demand for safer assets. The yen earlier appreciated against its U.S. counterpart, trading within one yen of a record high and adding to speculation Japan’s central bank may sell the currency to stem its appreciation.

“The main factor boosting the risk sentiment today is from the PMI reports globally,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. “Markets are pricing in a more constructive outlook for global growth in 2012, so that’s the main factor behind dollar weakness and stronger risk appetite.”

The 17-nation currency climbed 0.6 percent to $1.3164 at 1:52 p.m. New York time. The euro rose 0.7 percent to 100.44 yen, and the dollar was little changed at 76.30 yen, after reaching 76.03 yen, the least since Oct. 31, when it touched a post-World War II record of 75.35.

The Standard & Poor’s 500 Index advanced 1.2 percent and the MSCI World Index of equities rose 1.4 percent.

South Africa’s rand rose the most against the dollar among the major currencies, adding 1.7 percent to 7.6750.

The euro reversed an earlier decline after Markit Economics said its manufacturing gauge based on a survey of purchasing managers in the euro region rose to 48.8 in January from 46.9 in December. That compares to a median estimate of 48.7 in a Bloomberg survey of economists. In Germany, the output gauge reached the highest in six months.

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