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Forex - Dollar punished vs. rivals following weak U.S. data

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Forexpros - The U.S. dollar was broadly lower against most of its major counterparts on Monday, after disappointing U.S. data on manufacturing activity in the New York region and a report showing foreigners were net sellers of U.S. assets in June weighed on dollar sentiment.

During U.S. morning trade, the greenback was down against the euro, with EUR/USD jumping 1.44% to hit 1.4455.

The European Central Bank said earlier that it purchased EUR22 billion worth of Italian and Spanish government debt last week in an effort to prevent the euro zone's debt crisis from spreading to the region's third and fourth largest economies.

The greenback was also lower against the pound, with GBP/USD gaining 0.69% to hit 1.6395.

Bank of England policy maker David Miles said earlier that the U.K. economy is on a fragile recovery path, but added that further quantitative easing was not necessary at the moment.

Meanwhile, the greenback eased up against the yen, with USD/JPY edging 0.03% higher to hit 76.72.

Preliminary data released earlier in the day showed that Japan's gross domestic product shrank by 0.3% in the second quarter, or 1.3% on an annualized basis. Analysts had expected Japan's economy to contract by 0.9% in the quarter, or 2.5% on an annualized basis.

The yen was also weighed after Finance Minister Yoshihiko Noda pledged to take "bold action" to curb gains in the yen.

The dollar was also higher against the Swiss franc, with USD/CHF gaining 0.21% to hit 0.7796.

The Swissie was down sharply earlier after Swiss newspaper SonntagsZeitung reported on Sunday that the Swiss National Bank and the Swiss government were in "intense talks" over a possible exchange rate target level to curb strong gains in the currency.

Elsewhere, the greenback was lower against its Australian and Canadian counterparts, but up against the New Zealand dollar, with AUD/USD rising 1.13% to hit 1.0473, USD/CAD shedding 0.33% to hit 0.9839, while NZD/USD dipped 0.25% to hit 0.8301.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 1.01% to hit 73.95.

Earlier Monday, official data showed that an index of manufacturing conditions in New York State fell by 3.9 points to minus 7.7 in August from minus 3.8 in July.

Analysts had expected the index to improve to minus 0.4 in August.

A separate report showed that net foreign purchases of long-term U.S. securities totaled USD3.7 billion in June, significantly below expectations of USD30.1 billion.

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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.

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