NEW YORK Aug 1 The euro briefly extended gains
against the dollar on Wednesday after data showed the U.S.
manufacturing sector shrank for the second month in a row in
July and employment dropped to a 2-1/2-year low, bolstering the
case for further Fed action to stoke economic growth.
The euro edged higher against the dollar to $1.2323
from $1.2312 before the report but eased back as investors
waited for a monetary policy decision from the U.S. central bank
later in the day. It was last at $1.2309.
The dollar was last at 78.19 yen, unchanged from
where it was prior to the release of the data.
"The ISM was marginally weaker than expected and generally
consistent with the U.S. economy's broad weakness that the
Federal Reserve has alluded to in many of its speeches," said
Ravi Bharadwaj, market analyst at Western Union Business
Solutions in Washington. "It certainly adds further cause for
the Fed to engage in more quantitative easing."