Dollar Drops as Economic Data Suggests Extension of QE

The US dollar dropped as worse-than-expected macroeconomic reports from the Untied States fueled speculations that the Federal Reserve will maintain quantitative easing.
The Purchasing Managers’ Index of Institute for Supply Management unexpectedly fell from 50.7 percent in April to 49.0 percent in May. Analysts have hoped that the gauge would stay little changed. The reading below the 50.0 level indicated contraction and it was the first decline since November 2012.
This week’s non-farm payrolls should be a very important report that may influence Fed’s decision on the next meeting. So far, latest macroeconomic data was not supporting the case for withdrawal of monetary stimulus.
EUR/USD was at 1.3063 as of 2:00 GMT today after rising from 1.2993 to 1.3074. GBP/USD traded at 1.5323 after advancing from 1.5203 to 1.5318 on the previous session. USD/JPY fell from 100.41 to 99.51 before trading at 99.64.

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