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The dollar index, a measure of the strength of the US dollar against a basket of six major currencies, has advanced 0.18% today, following a report from the Institute for Supply Management (ISM) that shows US business activity picked up pace last month, despite the government shutdown.
The ISM non-manufacturing index climbed to 55.4 in October, a rise of a full point from the previous reading, which exceeded expectations. This follows a strong showing from the ISM’s manufacturing index at the tail end of last week.
The upbeat nature of the data, which includes improvements in the employment part of the report, raises hopes that the shutdown may not have been as damaging as previously thought and possibly presages a more solid showing for Friday payrolls than some have been fearing. This has supported the dollar, with EUR/USD dropping 0.3% to 1.3475.
The euro was pressured by comments made by ECB executive board member Joerg Asmussen, who said that data suggests ‘the shoots of a recovery are there, yet they are still very green and need to be nurtured carefully,’ and went on to describe the recovery in the euro are as ‘weak, fragile, and uneven.’ The ECB meets for its monthly policy meeting later this week.
US stocks slid earlier on Wall Street, but had largely recovered by early afternoon in New York. The Dow was unchanged at 15,639 after being down over 100 points earlier in the session. The S&P500 was down 0.09% at 1766.3.