US dollar weaker on soft data
The US dollar was weaker on Monday, on what analysts called a delayed reaction to new data last week that showed inflation lower than had been predicted and fewer housing starts than expected among other indications that the US economy is slowing. Most analysts now expect that the Federal Reserve will again decline to raise interest rates in September and quote a less than even chance of a hike in December.
The greenback dropped 0.6 percent against both the Australian dollar and the Canadian dollar, to $0.7637 and C$1.1183, respectively, while it fell 0.7 percent versus the euro to an 11-week low of $1.2911. The US currency also dropped 0.8 percent versus sterling and the Swiss franc, to $1.8968 against the UK currency and to SFr1.2226 in relation to the Swiss currency.
The Japanese yen also weakened, with analysts citing slowing growth in the Japanese economy, core inflation there under control, and the fact that another interest rate hike by the Bank of Japan is not likely to occur anytime soon. The yen fell 0.7 percent to a new low against the euro of ¥149.56, while it dropped 0.8 percent to ¥88.47 versus the Australian dollar and 0.9 percent to ¥219.64 in relation to sterling.
In other Asian currencies, the Chinese renminbi was up fractionally to Rmb7.9656 versus the US dollar, its highest point in relation to the greenback since last year’s revaluation.