The US dollar weakened on weaker-than-expected manufacturing data

New York ( – The US dollar weakened against a basket of other major currencies in late trading Monday (Tuesday morning WIB), retreating from a five-week high as the New York state or Empire State manufacturing index fell sharply in May, amid deadlocked talks about the US debt ceiling.

The dollar index, which measures greenbacks against six major rival currencies, it was down 0.24 percent to 102.4374 in late trade.

In late New York trading, the euro increased to US$1.0874 from US$1.0854 of the previous session, and the British pound rose to US$1.2528 from US$1.2449 in the previous session.

The US dollar bought 136.0770 Japanese yen, higher than 135.6600 Japanese yen in the previous session. The US dollar decreased to 0.8949 Swiss franc from 0.8979 Swiss franc, and it was down to 1.3469 Canadian dollars from 1.3561 Canadian dollars. The US dollar fell to 10.3432 Swedish krona from 10.3882 Swedish krona.

The New York Federal Reserve reported Monday that the New York state manufacturing index fell to a negative reading of 31.8 in May, lower than 10.8 in April. Economists are forecasting for a negative reading of 2.0.

“Inflation isn’t going to come down very quickly. And in that case, cutting interest rates doesn’t fit that scenario,” Raphael Bostic, president of the Atlanta Federal Reserve, said Monday.

Despite Bostic’s relative comments hawkishthe US dollar index weakened as “traders are taking profits after the recent rally,” said Vladimir Zernov, analyst at market information supplier FX Empire.

Improved overall risk sentiment is also weighing on the US dollar, according to Monex USA, a provider of foreign exchange, risk management and international payments solutions.

Monday’s decline in the dollar (15/5/2023) came after hitting its best weekly performance since September last year on Friday (12/5).

“The market is in consolidation mode and waiting for clearer signals from Washington about how they are going to prevent US defaults,” said Amo Sahota, director at forex consulting firm Klarity FX in San Francisco.

President Joe Biden is scheduled to meet with congressional leaders on Tuesday local time for face-to-face talks, a day before he leaves for a Group of Seven (G7) nations meeting in Japan.

While the two sides appear to be at a standstill, the White House has not ruled out the annual spending cap that Republicans say should accompany any increase in the nation’s $31.4 trillion debt limit.

Ahead of Tuesday’s meeting, US House Speaker Kevin McCarthy warned Monday that there would be “no move” toward a deal to raise the $31.4 trillion debt ceiling in talks with the White House, and he warned that time was running out to get agreement through Congress.

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Translator: Apep Suhendar
Editor: Citro Atmoko


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