Dollar falls on strong US manufacturing data

NEW YORK (AP) — The dollar fell against the euro and other major currencies Wednesday on stronger manufacturing data from the U.S. and China.

Traders also bought euros after Portugal successfully raised €1.5 billion ($1.97 billion) in a debt auction, easing fears about its economic prospects.

A trade group of purchasing managers said that its manufacturing index rose in January to 54.1 from 53.1 in December. Readings above 50 indicate expansion. That’s the fastest pace U.S. factories have grown in seven months.

China also said its manufacturing index grew in January.

“Investors remain optimistic because as long as there is evidence of growth in Asia, there will be hope that a sharp slowdown in the global economy will be avoided this year,” Kathy Lien, director of currency research for the currency trading company GFT, wrote in a note to clients.

The euro rose to $1.3188 in afternoon trading Wednesday from $1.3084 late Tuesday.

Traders tend to buy riskier currencies, such as the euro, when they perceive the global economy to be more stable.

In other trading, the British pound rose to $1.5846 from $1.5754. The dollar fell to 0.9136 Swiss franc from 0.9205 Swiss franc and to 0.9973 Canadian dollar from 1.0025 Canadian dollar.

The dollar rose to 76.33 Japanese yen from 76.20 yen.