Dollar Stays Weak Against Major Currencies
The U.S. dollar exhibited weakness on Tuesday after data showed improvements in euro area manufacturing and service sectors activity, and on President Donald Trump’s tweet that says the U.S.-China trade deal remains fully intact.
The dollar index slipped to 96.39 and despite recovering to 96.69, was still down in negative territory with a loss of about 0.35%.
Against the Euro, the dollar was weaker by nearly 0.4% at $1.1307. Survey results from IHS Markit showed the euro area private sector contracted at a slower pace in June as lockdowns to prevent the spread of the coronavirus disease outbreak were further relaxed. The flash composite output index advanced more-than-expected to 47.5 from 31.9 in May.
Output decreased again in both manufacturing and services, the latter showing the slightly steeper rate of decline. The services Purchasing Managers’ Index climbed to 47.3 from 30.5 in the previous month. The factory PMI rose to 46.9 in June from 39.4 in May.
Against Pound Sterling, the dollar weakened to $1.2518, losing about 0.4%. The downturn in the UK private sector also slowed in June after the record weakness seen during the height of the coronavirus lockdown, flash survey data from IHS Markit showed Tuesday. The IHS Markit/Chartered Institute of Procurement & Supply composite output index rose to 47.6 in June from 30.0 in May. The reading was above economists’ forecast of 41.0.
The Japanese currency was trading at 106.53 a dollar, compared with 106.90 on Monday evening.
The Aussie was stronger at $0.6930, rising from $0.6908. Australia’s private sector rebounded in June reflecting the loosening of restrictions related to the coronavirus pandemic, survey results published by IHS Markit showed.
The Commonwealth Bank flash composite output index climbed to 52.6 in June from 28.1 in the previous month. A score above 50 indicates expansion.
Against the Loonie, the dollar was stronger at C$1.3551, gaining from C$1.3522, as oil prices drifted lower.
The Swiss franc was little changed at 0.9448 a dollar a little while ago, after settling at 0.9449 on Monday.
In U.S. economic news, data from the Commerce Department showed a substantial increase in new home sales in the month of May. The data said new home sales spiked by 16.6% to an annual rate of 676,000 in May from a significantly downwardly revised rate of 580,000 in April.
Economists had expected new home sales to jump 2.7% to an annual rate of 640,000 from the 623,000 originally reported for the previous month.