Plus   Neg

Dollar Turns Weak Against Rivals On Weak Economic Data

The U.S. dollar eased on Friday, retreating from two-year highs recorded a session earlier, amid speculation about a rate cut after recent data from Markit showed a slowdown in U.S. manufacturing activity in May amid escalating trade tensions with China.

A drop in new home sales and declining durable goods orders too have added to speculation about a likely interest rate cut.

The dollar was notably lower against most of its major rivals.

The dollar index, which rose to 98.37 in the previous session, dropped to 97.55 today, losing about 0.3% in the process.

Against the euro, the dollar weakened to $1.1207, losing about 0.23%.

The pound sterling was up $0.44 at $1.2713, after British Prime Minister Theresa May announced she will resign as Conservative leader on Friday 7 June following the backlash against her new Brexit deal.

The Japanese currency strengthened to 109.28 yen a dollar, gaining nearly 0.3%.

The dollar shed nearly 0.4% against the Aussie with the AUD-USD pair trading at 0.6927.

Against Swiss franc, the dollar was weaker by 0.16% at 1.0017 and against the loonie, it was down 0.26% at 1.3439.

Data released overnight by IHS Markit showed that U.S. manufacturing activity dropped to its weakest pace in about ten years in May amid escalating trade tensions with China.

Besides the slowdown in manufacturing activity, data showing a drop in U.S. new home sales in April too pointed to a possible slowdown in economic growth.

In U.S. economic news today, durable goods orders tumbled by 2.1% in April after jumping by a downwardly revised 1.7% in March.

Economists had expected orders to slump by 2% compared to the 2.6% spike that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders were unchanged in April following a revised 0.5% drop in March. Economists had expected a 0.2% uptick.

On the trade front, Trump said on Thursday that Washington's complaints against Huawei Technologies might be resolved within the framework of a U.S.-China trade deal.

At the same time, he called the Chinese telecommunications giant "very dangerous."

"You look at what they've done from a security standpoint, a military standpoint. Very dangerous," Trump told reporters at the White House.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT