The US dollar ticked up a little today in an attempt to recover from yesterday’s big crash. Unfavorable economic data and the resulting monetary policy outlook remain detrimental to the US currency and may cause another thrust to the downside.
The vast majority of yesterday’s economic reports from the United States were rather negative. The biggest surprise for market participants was the huge drop of the New York manufacturing index. Another report revealed that producer price inflation slowed.
US policy makers were saying recently that economic developments do not warrant an early interest rate hike. Indeed, the latest data does not provide the Federal Reserve incentive to hurry with tightening monetary policy. Such outlook hurts the dollar, which was rising previously due to expectation of higher interest rates from the Fed.
EUR/USD went down from 1.2837 to 1.2828 as of 2:38 GMT today. GBP/USD declined from 1.6019 to 1.5991, while USD/JPY rallied from 105.91 to 106.08.
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