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Forex - Dollar drops on weak manufacturing data

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Investing.com - The U.S. dollar traded largely lower against most major currencies on Monday after a widely-watched manufacturing metric fell short of expectations, fueling talk the Federal Reserve will keep monetary policy loose for some time to come.

In U.S. trading on Monday, EUR/USD was up 0.20% at 1.2846.

The U.S. manufacturing sector grew less than expected in March.

The Institute for Supply Management's purchasing managers index for March fell to 51.3, from 54.2 in February.

Analysts had expected the index to remain unchanged at 54.2.

The figures sent the dollar falling on sentiments the Fed won't rush to dismantle stimulus programs such as its USD85 billion monthly bond-buying program, which weakens the greenback by flooding the U.S. economy with liquidity with the aim of keeping interest rates low.

Meanwhile, official data released Monday revealed that U.S. construction spending rose more than expected in March, which did little to curb the greenback's slide.

In a report, Census Bureau said that U.S. construction spending rose by 1.2% in February after contracting 2.1% in January.

Analysts were expecting U.S. construction spending to rise to 1.0% in February.

Trading was quiet, as many markets in Europe remained closed for the Easter holidays.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.26% at 1.5230.

The dollar was down against the yen, with USD/JPY trading down 0.93% at 93.35, and down against the Swiss franc, with USD/CHF trading down 0.57% at 0.9486.

The dollar was down against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.05% at 1.0169, AUD/USD up 0.03% at 1.0421 and NZD/USD trading up 0.02% at 0.8373.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.29% at 82.91.

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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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