NEW YORK: The dollar tumbled broadly Monday, dropping to its lowest points since last fall against the euro, pound and other currencies, as signs of recovery emerged from data on manufacturing from around the world.
The 16-nation euro soared to $1.4403 from $1.4250 late Friday, peaking at $1.4445, the highest point for the common currency since last September. The British pound, rocketed up to $1.6941 from $1.6686, hitting its highest level since last October at $1.6986.
The dollar rose to 95.25 Japanese yen, meanwhile, from 94.79 late Friday. The yen is also considered a “safe haven” currency.
On Monday, the Institute for Supply Management trade group said its manufacturing index rose to an 11-month high of 48.9. Readings above 50 signal growth. That mirrors improvements in the manufacturing sector in China, Britain and the euro zone.
The New Zealand and Australian dollars, which are strongly correlated with commodities prices, hit 10- and 11-month highs against the dollar as the price of oil, agricultural products and precious metals rose. Emerging-market currencies such as the Brazilian real, Mexican peso, Turkish lira and South Korean won were also higher against the dollar.
The US dollar index, which measures the greenback’s performance against a basket of currencies that includes the yen and euro, slid to its lowest point this year.
The dollar also hit its lowest point since October against the Canadian dollar, another currency tightly correlated with commodity prices, and a bottom for the year versus the Swiss franc.
In midday New York trading, the dollar fell to 1.0661 Canadian dollars from 1.0789 late Friday, and dropped to 1.0581 Swiss francs from 1.0689 francs.
Meanwhile, global stocks surged to a nine-month high on Monday.
Oil rose almost 3 percent to $71.37 a barrel and commodity prices surged.
US manufacturing shrank in July but slower than in June, while US construction spending beat expectations in June, bolstering the view the economy was pulling out of recession.
It was the fifth month in a row that spending on public construction, which makes up a third of total US construction, had made gains.
This drove the benchmark S&P 500 Index above the psychologically important 1,000 level, and Dow Jones Industrial Average up 1 percent, to 9,261.40. It also pushed the MSCI all-country world share index up 1.9 percent, eclipsing its previous high for the year reached on Friday.
Gold and silver prices rose to seven-week highs as the dollar slid against the euro to its lowest since mid-December, boosted by investors’ appetite for hard assets.
Spot gold hit an intraday high of $961.70 an ounce, matching the high set on June 11, and silver touched $14.47 an ounce, its highest since mid-June.
