Forex: Thursday’s review

Yesterday the dollar depreciated against the majority of its most-traded counterparts as reports showed manufacturing from China to the U.S. expanded in February, increasing speculation that global growth is on the mend. The Institute for Supply Management’s U.S. factory index fell to 52.4 in February from 54.1 in the prior month, the Tempe, Arizona-based group’s data showed. Readings above 50 signal growth. A separate report showed U.S. personal spending increased 0.2 percent in January, less than the 0.4 percent forecast in a Bloomberg survey. The U.S. grew at a “modest to moderate pace” in January and early February, fueled by manufacturers, the Fed said yesterday in its Beige Book business survey. The growth is being echoed in other parts of the world, spurring investor confidence in the global economic recovery. China’s purchasing managers’ index rose for a third month in February, increasing to 51 from 50.5 in January, the statistics bureau and logistics federation said.

The euro fell for a fifth day versus the pound, the longest such streak since November 2010, after a second round of loans from the European Central Bank yesterday failed to bring down Portuguese bond yields. The yields on five-year Portuguese notes rose for an eighth day, touching 17.5 percent, the highest level since Feb. 7. Default insurance on Greek debt won’t be paid out, the International Swaps & Derivatives Association said after it was asked to rule whether part of the nation’s $170 billion bailout was a credit event. The decision of the committee was unanimous, ISDA said on its website.

EUR/USD: yesterday the pair was under pressure.

GBP/USD: yesterday the pair rose, closed day above $1.5950.

USD/JPY: yesterday the pair gain consolidated nearby Y81.00.

European data for Friday starts at 0700GMT with German retail sales data, while at the same time, the UK BDO High Street Sales Tracker

data is released. EMU data at 1000GMT includes January PPI. UK data also includes the Markit/CIPS Construction PMI at 0930GMT along with Q4 Construction New Orders data.