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Dollar wobbles after manufacturing miss as traders look to payrolls

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SINGAPORE — The dollar nursed losses on

Tuesday after an unexpected slowdown in U.S. manufacturing

growth prompted investors to trim bets that a booming U.S.

economy could boost the greenback.

Data showed shortages of basic materials and transport

snarls depressed the Institute for Supply Management

manufacturing survey by 4.7 points to 64.7, toppling the dollar

from a three-week peak on the yen and a two-week high on the


With Asia trade thinned by holidays in Japan and China,

further moves were muted, leaving the dollar to drift up

slightly off overnight levels to sit at 109.14 yen and

at $1.2054 per euro.

The common currency rose 0.3% overnight and found additional

support from a surge in German retail sales and record-high euro

zone factory activity.

The Australian and New Zealand dollars edged a

fraction lower on Tuesday after bouncing overnight, while the

U.S. dollar index against a basket of key rivals tacked

on 0.05% to 91.036.

Traders’ focus is now on services figures due on Wednesday

and payrolls data on Friday and markets seem finely balanced.

Some analysts say strong figures might boost the dollar by

bringing forward expectations for higher interest rates, while


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others argue that a strong U.S. economy would weigh on the

currency as imports gain and the trade deficit grows.

“The ISM manufacturing report did not live up to

expectations but payrolls should be at least as strong as

consensus expectations,” Westpac analysts said in a note.

“The Fed’s dovish influential core won’t have any of it, but

expectations for solid U.S. data this week and likely more

hawkish regional Fedspeak leave the dollar index positioned for

more two-way price action.”

Benchmark ten-year U.S. Treasury yields fell 2.5

basis points on Monday following the ISM miss and as New York

Fed President John Williams reiterated that the recovery so far

is “not nearly enough” to prompt monetary policy tightening.

Also on the horizon are central bank meetings in Britain and

Norway, and the Reserve Bank of Australia’s policy outcome at

0430 GMT.

No changes are expected from the RBA although the tone of

the statement might provide hints on whether the bank will

upgrade economic forecasts it is due to publish on Friday.

The Australian dollar was 0.1% weaker in morning trade at

$0.7756, and the kiwi a tad softer at $0.7194.

Sterling was perched near a week-high on the euro

and had overnight punched through its 20-day moving average

against the dollar to sit at $1.3905 as traders reckon the Bank

of England may announce a slowdown of its bond purchases at its

Thursday meeting.

Elsewhere cryptocurrency ether extended its record


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run, zooming to a new record peak of $3,457.64 before pulling

back a fraction.


Currency bid prices at 058 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Euro/Dollar $1.2055 $1.2063 -0.06% -1.33% +1.2063 +1.2053

Dollar/Yen 109.0900 109.0750 +0.01% +5.62% +109.1700 +109.0700


Dollar/Swiss 0.9120 0.9113 +0.05% +3.06% +0.9121 +0.9118

Sterling/Dollar 1.3899 1.3909 -0.03% +1.78% +1.3908 +1.3894

Dollar/Canadian 1.2283 1.2278 +0.06% -3.52% +1.2287 +1.2276

Aussie/Dollar 0.7754 0.7764 -0.15% +0.77% +0.7763 +0.7748

NZ 0.7192 0.7200 -0.11% +0.15% +0.7202 +0.7188


All spots

Tokyo spots

Europe spots


Tokyo Forex market info from BOJ

(Reporting by Tom Westbrook

Editing by Shri Navaratnam)


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