Investing.com - The dollar was higher against the yen on Thursday, boosted by the improving outlook for the U.S. economy, while the Australian dollar slumped to more than three year lows in the wake of dismal employment data.
USD/JPY hit highs of 104.92, the strongest since January 10 and was last up 0.17% to 104.75.
Demand for the dollar continued to be underpinned after data released on Wednesday showed that manufacturing activity in the Empire State expanded at the fastest pace since May 2012 in January as new orders rose sharply.
A separate report showed that U.S. producer price inflation rose at the strongest rate in six months in December.
The strong data reinforced expectations that the U.S. economic recovery will continue to deepen going into this year and offset lingering concerns over last week’s surprising weak U.S. nonfarm payrolls report.
The yen showed little reaction after data on Thursday showed that Japanese core machinery orders unexpectedly rose for a second month in November as demand picked up ahead of an upcoming sales tax hike.
The dollar was slightly lower against the euro, with EUR/USD easing up 0.11% to 1.3618.
The dollar was higher against the pound, with GBP/USD sliding 0.19% to 1.6338, while USD/CHF slipped 0.18% to 0.9070.
The Australian dollar tumbled after data showed that the economy shed 22,600 jobs in December, compared to expectations for new jobs growth of 7,500. Australia’s unemployment rate remained unchanged at 5.8% in line with forecasts. AUD/USD hit 0.8777, the lowest since August 2010 and was last down 1.45% to 0.8786. Meanwhile, NZD/USD was down 0.26% to 0.8315.
Elsewhere, USD/CAD edged up 0.07% to 1.0942, not far from the four year highs of 1.0990 struck on Wednesday. Canada’s dollar remained broadly weaker after dire employment data last week cemented expectations that the Bank of Canada will stick to its dovish stance on interest rates.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.04% to 81.08.
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