Soft data clips dollar ahead of Jackson Hole

Singapore, Aug. 24 (BNA): The dollar nursed losses against Asian currencies on Thursday, after softer-than-expected global economic data muddied the interest rate outlook and pushed down U.S. yields ahead of the Federal Reserve’s Jackson Hole symposium.

 

The Australian dollar, which had been taking a battering on signs of China’s slowdown and resilience in the U.S., jumped 0.9% on Wednesday after U.S. manufacturing and services PMIs missed expectations.

 

It held those gains on Thursday, as did the New Zealand dollar and, for the most part, the Japanese yen and emerging market currencies in Asia, Reuters reported. 

 

“PMI data suggests that the outlook is not as great as one would hope and that might suggest some caution on the part of developed market central banks in terms of further tightening,” said Bank of Singapore currency strategist Moh Siong Sim.

 

“It’s definitely good news for the risky assets and bad news for the dollar.”

 

U.S. business activity growth was its weakest since February as the economy seems to be starting to stall, August data published on Wednesday showed.

 

Ten-year U.S. yields tumbled 13 basis points (bps) to 4.198% on the news, their sharpest one-day slide in more than three months, taking some of the heat out of recent rises.

 

The dollar index, which measures the greenback against a basket of six major currencies remains higher for the month, but dipped about 0.2% on Wednesday and was flat at 103.39 through the Asia session.

 

 

ZH