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Dollar firms on strong US manufacturing data

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(Globalpost/GlobalPost)

The dollar strengthened on Thursday after encouraging US economic data, while cautious comments from ECB chief Mario Draghi lent little support to the euro.

The euro was trading at $1.3208 around 2100 GMT, down from $1.3301 at the same time on Wednesday.

The dollar also gained ground against the Japanese currency, buying 99.52 yen compared with 97.92 yen the prior day.

The euro rose to 131.45 yen from 130.24 yen.

The dollar strengthened after "better-than-expected" US data and a relatively dovish press conference" by Draghi "pushed it higher against both the euro and the yen," said Boris Schlossberg of BK Asset Management.

The Institute for Supply Management's PMI index showed US manufacturing activity surged to its highest level in more than two years in July, well above market estimates.

The ISM report came a day after the government said the US economy grew 1.7 percent in the second quarter, much better than the 1.1 percent expected.

The signs of momentum in the world's largest economy helped to push Wall Street stocks higher on Thursday -- the S&P 500 index closed at a record high.

Across the Atlantic, European Central Bank President Draghi, in an after monetary policy meeting news conference, struck a "neutral" tone, Christopher Vecchio of DailyFX said.

"It is worth noting that there was a great deal of time spent on how weak credit growth has been recently -- more so than at previous meetings," he said.

"If risk-aversion picks up and European yields rise, banks will suffer; and more liquidity provisions shouldn't be ruled out."

The dollar was stronger against other major currencies compared with Wednesday's performance.

The greenback firmed to 0.9366 Swiss franc from 0.9259 franc.

The pound bought $1.5115, down from $1.5205.

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http://www.globalpost.com/dispatch/news/afp/130801/dollar-firms-strong-us-manufacturing-data