FX Roundup: Dollar heads lower on lacklustre data
Updated : 16:33
The dollar shed gains against major currency crosses on Monday, following a sequence of lacklustre data.
Data from the US Commerce Department showed the country’s construction spending nudged up 0.1% to $1.12trn compared with a downwardly-revised 0.6% decline the previous month, missing expectations for a 0.6% increase.
Spending on private construction was down 0.6% to a seasonally-adjusted annual rate of $824bn from $828.8bn in November. Residential construction was at a seasonally adjusted annual rate of $429.6bn in December, up 0.9 percent from November’s $425.8bn.
Concurrently, the Institute for Supply Management’s US manufacturing sector purchasing managers’ index edged higher from a reading of 48.0 for the month of December to 48.2. However, it too was less than the reading of 48.4 which economists had pencilled in.
At 1547 GMT, the dollar was down 0.09% against the yen at JPY121.030. The euro was up 0.57% against the greenback exchanging at $1.0893, while the pound rose 0.86% exchanging at $1.4367 ahead of ‘Super Thursday’ with the Bank of England poised to unveil its interest rates decision, minutes of its monetary policy meeting and the latest quarterly inflation report on 4 February.
Alvin T. Tan, analyst at Societe Generale, said, “The BoE has an opportunity this week to address market expectations, which are pricing in some probability of a rate cut this year. On Super we expect BoE Governor Mark Carney to push back against the market rate expectations. The UK services PMI due this week will also be a factor for sterling.”
Elsewhere, the Australian dollar was broadly flat against the greenback exchanging at US$0.7085, while the New Zealand dollar rose 0.51% exchanging at US$0.6517.
In the Americas, the greenback rose 0.29% against the Canadian dollar exchanging at CAD$1.4017. The dollar’s rise was also echoed in Latin America, with the greenback up against major regional crosses, including the Colombian (up 1.26%), Chilean (up 0.14%) and Mexican (up 0.87%) pesos.