Dollar higher, though Empire State manufacturing index signals contraction

The dollar was higher on Monday, although the New York Federal Reserve’s index of manufacturing conditions contracted for the fourth straight month in November, dampening optimism over the strength of the economy, official data showed earlier.

Business activity in the New York region declined for the fourth straight month in November, the New York Fed said Monday, and showed little signs of improvement.

The Empire State manufacturing gauge for November inched up to negative 10.7 from negative 11.4 in October. Many economists thought that there would be a smaller contraction in the index. Analysts had forecast a reading of negative 6.5 for the index in November.

This is the first time since early 2009 that the Empire State index has been below negative 10 for four straight months. New orders and shipments had smaller contractions in November while labor conditions get worse, with falls in both employment levels and hours worked. Indexes for the six-month outlook showed little optimism about the future.

The dollar was higher against the euro with EUR/USD last trading at 1.0732, down 0.39%.

GBP/USD was down 0.25% to settle at 1.5199.

USD/JPY rose 0.31% to 122.99, while USD/CHF added 0.04% to trade at 1.0063.