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Dollar remains moderately higher in quiet trade

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Investing.com - The dollar remained moderately higher against the other major currencies on Monday, as markets continued to digest the downbeat U.S. growth data released on Friday and eyed an upcoming report on U.S. manufacturing activity due later in the day.

USD/JPY rose 0.29% to trade at 102.33, off Friday's three-week trough of 101.94.

The dollar recovered from sharp losses posted after the Bank of Japan approved only moderate stimulus measures at Friday monetary policy meeting, disappointing markets which were hoping for much more aggressive easing.

While the BoJ eased its monetary policy further by increasing its purchases of exchange-traded funds, it opted not to cut interest rates deeper into negative territory or increase the monetary base, as analysts had widely expected.

But sentiment on the greenback remained fragile after the advance read on second quarter U.S. gross domestic product showed on Friday a 1.2% annualized growth rate, well below expectations for 2.6%. First quarter GDP was revised lower to 0.8% from 1.1%.

The disappointing data lessened expectations for an early interest rate rise from the Federal Reserve.

EUR/USD was little changed at 1.1167.

The pound slipped lower, with GBP/USD down 0.14% at 1.3209, while USD/CHF edged down 0.15% to 0.9676.

Research group Markit earlier reported that its U.K. manufacturing purchasing managers' index fell to 48.2 last month from a reading of 52.1 in June.

It was the lowest level since early 2013 and worse than a preliminary report released on July 22 that had shown a drop to 49.1 in July.

The dowbeat data added to concerns over the strength of the U.K. economy and boosted expectations for a rate cut by the Bank of England at its policy meeting this week.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.49% at 0.7568 and with NZD/USD sliding 0.35% to 0.7184.

Data earlier showed that China's official manufacturing PMI ticked down to 49.9 in July from 50.0 the previous month, compared to expectations for an unchanged reading.

However, the Caixin manufacturing PMI rose to 50.6 last month from 48.6 in June, compared to expectations for an uptick to 48.7.

China is Australia's biggest export partner and New Zealand's second biggest export partner.

Elsewhere, USD/CAD gained 0.28% to 1.3065.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.12% at 95.64, just off off Friday's five-week low of 95.33.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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