Weak data makes a dollar to drop.
Additionally, trade friction worries hurt sentiment.
Trade war extends to Brazil and Argentina.
The dollar was a near to one-week low versus the yen on Tuesday. Moreover, against the euro, it was near the weakest in almost weeks, on concern about weak U.S. manufacturing data and signs in the U.S. trade war new fronts.
After the U.S. President Donald Trump announced tariffs on metal imports from Argentina and Brazil, sentiment also took a hit.
There are signs of improvement in recent U.S. economic data. The world’s largest economy stabilizes, says an unexpected decline in construction spending, and a fourth consecutive month of shrinking manufacturing activity.
Investors are worried about how the United States will finish the 16 month-long trade war with China. More tariffs on other countries’ goods will have an additional risk to the global economy.
Yukio Izhizuki, Daiwa Securities’ foreign exchange strategist, said that the weak data made a lot of people cut losses and give up dollar longs.
There is no reason to chase the dollar’s upside from here, but this may have run its course. Trade friction is a lingering threat, which is not suitable for the sentiment of the market.
Dollar Versus Other Currencies
On Tuesday in Asia, the dollar traded at 109.00 yen. It was close to its lowest in a week. Versus the euro after falling 0.56% on Monday, it was quoted at $1.1076. It is the most significant decline against the single currency since September 17.
The dollar index stood at 97.887 against a basket of six major currencies, having fallen by the most in six weeks on Monday.
Index of national factory activity fell 0.2 points to 48.1 in November, said the U.S. Institute for Supply Management on Monday. Reuters polled economists who anticipated a rise to 49.2 from 48.3 a month prior.
This is the situation of today’s market.
