LONDON: The U.S. dollar edged back toward multi-month highs on Wednesday, taking back some ground lost when bulls got cold feet after data showed U.S. manufacturing contracted in November for the first time in three years.
The dollar index .DXY inched up about 0.1 percent to 99.894, after skidding below an 8-1/2-month high of 100.310 set on Monday – a high within a few ticks of its 12-year peak of 100.390 set in March.
The index, which tracks the U.S. unit against a basket of rival currencies, rallied 3.3 percent last month on expectations that the Federal Reserve is gearing up to hike U.S. interest rates at its Dec. 15-16 policy review.
But on Tuesday, the closely watched ISM survey prompted investors to trim some of their bullish dollar positions. The national factory index fell to 48.6 as the sector buckled under the weight of a strong greenback and deep spending cuts by energy firms.
Investors awaited the key nonfarm payrolls report on Friday, which is expected to show that employers added 200,000 jobs in November, according to economists polled by Reuters. A solid report would cement expectations that the Fed is on track to increase interest rates this month.
