TOKYO- The dollar bounced off two-year lows on Wednesday as US data pointed to a firm manufacturing activity, while the euro retreated from its highest levels since 2018 on profit-taking.
Economic data published on Tuesday showed US manufacturing activity accelerated to a nearly two-year high in August amid a surge in new orders, with the reading from the Institute for Supply Management highest level since November 2018.
The US data followed similarly upbeat Chinese and European manufacturing indicators.
Analysts said that an increase in pent-up demand has contributed to the rise in the greenback.
“In hindsight, it was a strong data,” said Rikiya Takebe, senior strategist at Okasan Online Securities.
“But when you look closely into the eighteen industries, not all of them registered growth in employment… there wasn’t an improvement in employment overall,” he said.
The dollar index inched up 0.16 percent at 92.390, having hit its lowest since April 2018 of 91.737.
Separate data from the Australian Bureau of Statistics showed Australia suffered its worst economic fall in quarterly domestic product on record last quarter as the coronavirus pushed the country into recession.