Investing.com - The dollar remained moderately lower against the other major currencies on Tuesday, but still close to an eight-month peak as investors eyed an upcoming report on U.S. manufacturing activity amid growing hopes for a December rate hike by the Federal Reserve.
USD/JPY held steady at 123.16.
Markets were jittery after data on Tuesday showed that China's manufacturing purchasing managers' index ticked down to 49.6 last month from 49.8 in October. Analysts had expected the index to remain unchanged in November.
The disappointing data fuelled fresh concerns over the outlook for growth in the world's second largest economy.
EUR/USD gained 0.32% to 1.0599, barely off the previous session's seven-month trough of 1.0556.
Eurostat reported on Tuesday that the euro zone’s unemployment rate fell to 10.7% in October from 10.8% a month earlier. This is the lowest rate recorded in the euro area since January 2012. Analysts had expected the jobless rate to hold steady at 10.8% in November.
The report came shortly after research group Markit said its German manufacturing PMI rose to 52.9 in November from 52.6 the previous month.
Also in Germany, data showed that the number of unemployed people declined by 13.000 last month, compared to expectations for a 5.000 drop.
Sentiment on the euro remained vulnerable however, as the European Central Bank has been signaling over the past weeks that it is ready to implement additional easing measures in order to boost inflation in the euro zone and support growth.
Elsewhere, the dollar was steady against the pound and the Swiss franc, with GBP/USD at 1.5066 and with USD/CHF slipping 0.11% to 1.0296.
The pound pared earlier gains after Markit reported that its U.K. manufacturing PMI fell to 52.7 last month from a revised reading of 55.2 in October. Analysts had expected the index to decline to 53.6 in November.
But sterling remained supported after Bank of England Governor Mark Carney said that no new wave of capital regulation was scheduled for U.K. banks.
The BoE had said earlier Tuesday that it would require banks to hold as much as £10 billion extra capital as the credit cycle moves into a more normal phase, but stopped short of immediate action.
The BoE also said that all seven major U.K. banks passed stress tests, although Standard Chartered (L:STAN) and the Royal Bank of Scotland (L:RBS) fell short in some parts of the assessment.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.88% at 0.7289 and with NZD/USD rallying 1% to 0.6651.
Earlier Tuesday, the Reserve Bank of Australia left its benchmark interest rate unchanged at 2.00%, in a widely expected move.
Meanwhile, USD/CAD slid 0.30% to trade at 1.3321, still near last week's two-month high of 1.3437
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.23% at 100.04, still very close to Monday's eight-month peak of 100.35.