The dollar lost its initial gains and tumbled in New York, ending the day lower than peers on falling US Treasury yields on weak ISM Manufacturing PMI amid weak trade as Japan, China and the UK remain closed for the weekend.
In terms of data, Reuters reported that US manufacturing activity grew at a slower pace in April, likely due to a lack of resources amid constrained demand from rising vaccinations and massive fiscal stimulus. The Institute for Supply Management (ISM) said Monday that its index of national manufacturing activity fell to 60.7 last month after rising to 64.7 in March, the highest level since December 1983. A reading above 50 indicates expansion in production. which is 11.9% of the US economy. Economists polled by Reuters predicted the index would rise to 65 in April.
Against the Japanese yen, the dollar initially rose from 109.20 in New Zealand to 109.66 in Asia. Despite rising to a nearly 3-week high of 109.69 in the morning hours in Europe, the price erased its daily gains and fell to session lows of 108.90 due to the general weakness of the US dollar due to falling US Treasury yields before stabilization, the price in last traded at 109.06. next to the closure.
The single currency initially fell from 1.2035 (New Zealand) to 1.2014 session lows at the European open. However, the pair quickly eliminated intraday losses and rallied to 1.2057 in Europe, then rallied sharply to a daily high of 1.2075 in New York on general dollar weakness before weakening.
Although the British pound fell from 1.3835 in Asia to session lows of 1.3801 on the European + open, the pair found renewed buying and climbed to 1.3894 on the New York open before hitting an intraday high of 1.3931 in New York from – for the weakness of the US dollar, as well as the cross-rate. buying the pound sterling, especially against the euro, before weakening.
In other news, Reuters reported that the European Central Bank may begin phasing out emergency stimulus measures when the pace of coronavirus vaccinations reaches critical levels and the economy picks up steam, the bank’s vice president, Luis de Guindos, told an Italian newspaper.
The next ECB meeting will take place on June 10, and conservative politicians are already calling for a cut in bond purchases, while others, especially from the south of the bloc, insist on remaining patient with the return of support. “If, by accelerating the vaccination campaign, we can vaccinate 70% of Europe’s adults by summer and the economy picks up momentum, we can also start thinking about phasing out the emergency from monetary policy,” de Guindos said la Repubblica. “The normalization of monetary policy must go hand in hand with the normalization of the economy,” he said in an interview with the newspaper.
The data will be published on Tuesday:
Australia trade balance, imports, exports, RBA interest rate decision, French budget balance, Swiss consumer confidence, UK manufacturing PMI markit, US trade balance, Redbook, ISM New York index, non-defensive durables, commodities Durables, Manufacturing Orders, Durable Goods – Transport, Canada Building Permits, Balance of Trade, Exports, Imports, New Zealand GDT Price Index.