(RTTNews) - The dollar gained on the euro and sterling but gave back its early gains versus the yen on Tuesday in New York. Markets worldwide were roiled when US data from the Institute of Supply Management revealed that activity in the service sector unexpectedly contracted for the first time since March of 2003.
The ISM said that its index of activity in service sector fell to 41.9 in January from a revised 54.4 in December, with a reading below 50 indicating contraction in the sector. Economists had expected the index to edge down to 53.9. The data prompted many analysts to predict that the US economy was entering a prolonged period of recession.
The dollar raced higher versus the euro on Tuesday, jumping almost 2 cents to 1.4622. Euro-zone retail sales edged down 0.1% in December compared to a 0.5% fall in November. Economists were looking for an increase of 0.2%.
The dollar hit a 2-week high versus the sterling on Tuesday, extending Friday's significant gains. The greenback rose to 1.9603, up more than a cent from its overnight levels.
Versus the yen, the dollar advanced to a 10-day high of 107.73 before racing lower on risk aversion after the ISM data. The dollar fetched 107 at 3 pm ET, having come off its mid-day low near 106.70.
Source: Nasdaq.com
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