Dollar Loses Ground Against Major Counterparts On Weak Data

RTTNews | 48 दिनों पहले
Dollar Loses Ground Against Major Counterparts On Weak Data

(RTTNews) - The U.S. dollar turned in a weak performance on Wednesday, weighed down early on in the New York session by data showing a contraction in the nation's manufacturing activity and a drop in job openings, and then reacting to the Federal Reserve's policy statement, and Jerome Powell's comments.

The central bank left its interest rates unchanged as expected, citing a lack of further progress toward its 2% inflation objective in recent months.

Members of the Fed also reiterated they need "greater confidence" inflation is moving sustainably toward 2% before they consider cutting interest rates.

Meanwhile, the Fed said it would continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities but revealed plans to slow the pace of decline.

The central bank said it would slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.

In U.S. economic news, a report released by payroll processor ADP showed private sector employment shot up by 192,000 jobs in April after jumping by an upwardly revised 208,000 jobs in March.

Economists had expected private sector employment to climb by 175,000 jobs compared to the addition of 184,000 jobs originally reported for the previous month.

A report released by the Labor Department showed job openings in the U.S. fell by more than expected in the month of March, decreasing to 8.488 million from an upwardly revised 8.813 million in February.

Economists had expected job openings to dip to 8.690 million from the 8.756 million originally reported for the previous month.

A report released by the Institute for Supply Management showed a modest contraction by U.S. manufacturing activity in the month of April.

The ISM said its manufacturing PMI slipped to 49.2 in April from 50.3 in March, with a reading below 50 indicating contraction. Economists had expected the index to edge down to 50.0.

The dollar index dropped to 105.70 after the Fed's policy announcement, and despite recovering to 105.90, remains well below the flat line, losing about 0.3%.

Against the Euro, the dollar weakened to 1.0720 from 1.0667. The dollar was down against Pound Sterling at 1.2531, easing from 1.2491. Against the Japanese currency, the dollar was down sharply, fetching 154.56 yen a unit, compared to 157.80 yen on Tuesday.

The dollar weakened to 0.6523 against the Aussie. Against Swiss franc, the dollar eased to CHF 0.9158 from CHF 0.9195. The Loonie strengthened to 1.3781 against the dollar, but pared some gains subsequently, and was last seen at 1.3738, still fairly stronger than yesterday's closing level.

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