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Dollar slides vs. counterparts but losses seen limited

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Investing.com -

Investing.com - The dollar fell against the other major currencies on Monday, but losses were expected to remain limited after positive U.S. manufacturing data and as the yen remained under broad selling pressure after ratings agency Moody's downgraded Japan's sovereign debt rating.

In a report, the Institute for Supply Management said its index of purchasing managers fell to 58.7 last month from a reading of 59.0 in October. Analysts had expected the manufacturing PMI to decline to 57.9 in November.

USD/JPY hit highs of 119.14, the most since August 2007, before falling back to 118.18, down 0.28% for the day.

The yen remained under pressure after Moody's downgraded Japan's sovereign debt rating by one notch to A1, citing "heightened uncertainty" over Japan's ability to cut its fiscal deficit following a decision by Prime Minister Shinzo Abe to delay a planned sales tax hike.

"Fiscal consolidation will become increasingly difficult to achieve as time passes given rising government spending, particularly for social programs associated with a rapidly ageing population," the rating agency said.

EUR/USD rose 0.21% to 1.2478, off overnight lows of 1.2418.

Data on Monday showed that the euro zone's manufacturing PMI slowed to 50.1 from a preliminary reading of 50.4 last month, just barely above the 50 level separating growth from contraction.

Germany's manufacturing PMI entered contraction territory for the first time in 17 months, falling to 49.5, as new orders fell at the fastest rate in nearly two years.

The French manufacturing PMI remained in contraction territory at 48.4, while Italy's factory PMI came in at 49.0.

The pound rose to session highs after data showed that U.K. manufacturing activity rose to a four month high in November, easing concerns that the economic recovery is slowing.

GBP/USD climbed 0.52% to 1.5722.

The U.K. manufacturing PMI ticked up to 53.5 last month from 53.2 in October. Economists had expected the index to edge down to 53.1.

The dollar slipped lower against the Swiss franc, with USD/CHF down 0.14% to 0.9637.

The Australian dollar touched four-year lows overnight, and AUD/USD was last down 0.21% to 0.8485 after official data showed that China's manufacturing sector expanded at the slowest pace in eight months in November.

A broad based selloff in commodities, which saw oil fall below $70 a barrel also weighed.

Meanwhile, NZD/USD gained 0.46% to 0.7878 and USD/CAD declined 0.36% to trade at 1.1374.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was down 0.45% to 88.01, pulling back from last week's more than four-year highs of 88.52.

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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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