The dollar strengthened against its peers today following the release of varied US economic data as the market focused on meeting minutes due to be released by the Federal Reserve tomorrow. The Institute of Supply Management reported that its non-manufacturing PMI rose from a reading of 53.4 in February, which marked a near 2-year low, to a reading of 54.5 in April. Experts forecast the index to climb to 54.0. The US Commerce Department released data which revealed that the US trade deficit grew from $45.88 billion in January to $47.06 billion in February, while experts forecast the deficit to expand to $46.2 billion. The greenback was still faced with pressure to the downside as last Friday’s nonfarm payrolls data did not change outlook that the Fed will remain vigilant in its stance on rate increases. The US dollar index was last up 0.05%, trading at 94.64 still within range of its 5-month-plus low of 94.30 reached last week.
The euro weakened against the dollar with the pair down 0.04%, trading at 1.1385 off its session low of 1.1335 after having come off its session high of 1.1405 reached earlier in the day. Data revealed that service sector output in the eurozone inched down in March. The region’s services purchasing managers’ index dropped from a reading of 53.3 in February to 53.1 in March, compounding forecasts for a reading of 54.0.
The pound weakened against the dollar with the pair down 0.76%, trading at 1.4152 off its session low of 1.4121 after having come off its session high of 1.4278 reached earlier in the day. Markit released data which revealed that its services purchasing managers’ index increased from a reading of 52.7 in February, which marked a near 3-year low, to a reading of 53.7 in March. Experts forecast the index to rise to 53.7 in March.
The yen strengthened against the dollar with the pair down 0.88%, trading at 110.36 off its session low of 109.94 after having come off its session high of 111.35 reached earlier in the day. The yen was supported, rising to 17-month highs against the dollar by an increase in safe haven demand as oil posted losses for its 3rd consecutive session, reaching 1-month lows. The yen’s advances heightened outlook that the Bank of Japan will intervene to weaken the currency, with the market speculating at what level the central bank will make its move. BOJ Governor Haruhiko Kuroda commented today on the central bank’s preparedness to widen policy by reducing rates even further below zero.
The Australian, New Zealand and Canadian dollars weakened against the greenback as commodity-associated currencies were pressured to the downside, and as riskier assets lost demand, as oil prices extended losses amid market uncertainty as to whether or not a deal will be made to halt production. US crude was down 0.67%, trading at $35.46 per barrel.
The Aussie dollar tanked 1.0% against the greenback, with the pair trading at 0.7530 off its session low of 0.7510 after having come off its session high of 0.7631 reached earlier in the day. The kiwi dollar declined 0.50% against the greenback, with the pair trading at 0.6800 off its session low of 0.6758 after having come off its session high of 0.6840 reached earlier in the day. As was broadly anticipated by the market, the Reserve Bank of Australia kept its key rate unchanged at 2.00%, while indicating there could be room for rate decreases going forward. Data revealed that Australia’s trade deficit expanded from AUD 3.156 billion in January to AUD 3.410 billion in February, while experts forecast the deficit to shrink to AUD 2.600 billion. The loonie lost 0.51% against the dollar, with the pair trading at 1.3154 off its session high of 1.3218 after having come off its session low of 1.3064 reached earlier in the day. Data revealed that Canada’s trade deficit grew from CAD 0.63 billion in January to CAD 1.91 billion in February, while experts forecast the deficit to expand to CAD 0.90 billion.
Disclaimer: This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.