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Dollar Slips On Disappointing Manufacturing Data

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Australian Dollar Symbol isolated on white background. 3D render

The dollar moved lower against other major currencies after disappointing manufacturing data showed activity in August declined to a seven-month low. The greenback was also under pressure as investors turned their focus to nonfarm payrolls data due later today.

Sterling was higher against the dollar, rising 1.16% to 1.3291. The euro climbed 0.27% to 1.1185 against the dollar.

The Institute for Supply Management reported that its index of manufacturing activity declined to 49.4 in August, down from a reading of 52.6 in July. Analysts were expecting activity to fall to 52.

On Thursday, the Department of Labor said the number of people filing for jobless claims benefits rose by 2,000 to 263,000 in the week ended August 27. Analysts were projecting a 4,000 rise in claims.

Market players will now focus their attention on the nonfarm payrolls report for indications on the strength of the job market. Fed officials last week said that the pace of interest rate hikes will be data-dependent.

The pound gained strength on a new report that showed U.K. manufacturing activity had moved into expansion territory after falling to its worst level in three years.

Markit, the research group, said its manufacturing PMI climbed to 53.3, a 10-month high, from 48.2 in July. Analysts were expecting a reading of 49.

Meanwhile, the dollar slipped against the yen, falling 0.15% to 103.28. The New Zealand and Australian dollars were both higher against the greenback, trading at 0.7281 and 0.7538 respectively.

The dollar index was at 95.7, down 0.33%.

While Australia released disappointing economic data, the Aussie found support after China said its manufacturing activity moved back into expansion territory. The official PMI was at 50.4 in August, up from 49.9 in July. Australia’s largest export partner is China.

Retail sales were flat in Australia, while private capital expenditure was down by 5.4% the last quarter.

 

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