U.S. Dollar Extends Fall
03 Maio 2016 - 1:28AM
RTTF2
The U.S. dollar extended its decline against the other major
currencies in early European trading on Tuesday, following the
releases of weak economic data from the U.S. released overnight,
that pared expectations for a June rate hike.
Data from the Institute for Supply Management showed that U.S.
manufacturing activity grew slower than expected in the month of
April.
The ISM said its purchasing managers index dipped to 50.8 in
April from 51.8 in March, although a reading above 50 indicates
growth in the manufacturing sector. Economists had expected the
index to edge down to 51.5.
Data from the Commerce Department showed that the U.S.
construction spending increased less than expected in the month of
March.
The construction spending rose 0.3 percent to an annual rate of
$1.138 trillion in March from a revised $1.134 trillion in
February. Economists had expected spending to increase by 0.5
percent.
These weak data coming on the heels of dovish Fed statement and
disappointing economic growth data released last week fueled hopes
that the Federal Reserve is likely to hike interest rates only
twice this year.
Investors await the non-farm payrolls report for April due on
Friday, ADP's private payrolls, considered precursor to the NFP
data, and the results of the Institute for Supply Management's
non-manufacturing survey, scheduled for release on Wednesday, for
more clues about the economy.
Yesterday, the greenback fell by 0.8 percent against the euro,
0.44 percent against the pound and 0.48 percent against the franc
on speculation that the Fed will raise rates slowly.
The greenback has been trading in a negative territory in Asian
trading.
The greenback fell to a 3-week low of 0.9512 against the franc
and a 4-month low of 1.4740 against the pound, from its early highs
of 0.9554 and 1.4660, respectively. If the greenback extends slide,
it may find support around 0.94 against the franc and 1.49 against
the pound.
The greenback slipped to more than an 8-month low of 1.1571
against the euro, 1-1/2-year low of 105.72 against the yen and more
than a 10-month low of 1.2475 against the loonie, off its previous
highs of 1.1521, 106.46 and 1.2538, respectively. The greenback may
find support around 1.17 against the euro, 104.00 against the yen
and 1.22 against the loonie.
Looking ahead, U.K. manufacturing PMI for April and Eurozone PPI
for March are due shortly.
At 10:30 am ET, Federal Reserve Bank of Cleveland President
Loretta Mester speaks in a panel discussion titled "Unconventional
wisdom: How will unusual monetary policy affect market liquidity"
at the Atlanta Federal Reserve's Annual Financial Markets
Conference, in Amelia Island.
The Bank of Canada Governor Stephen Poloz speaks in a panel
discussion at the Milken Institute's Global Conference in Los
Angeles at 12:30 pm ET.
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