Forex - Dollar Remains Down vs. Rivals After PMI Reports

Forexpros – The U.S. dollar remained lower against all of its major rivals on Tuesday, after PMI data from the euro zone and China boosted demand for riskier assets, weighing on the greenback.

During European afternoon trade, the greenback was down against the euro, with EUR/USD climbing 0.72% to hit 1.4464.

The euro zone’s manufacturing purchasing managers’ index fell to 49.7 from 50.4 in July. Economists had forecast a reading of 49.5. The region’s services PMI slipped to 51.5 from 51.6 in July, holding above forecasts for a reading of 50.7.

Germany’s manufacturing purchasing managers’ index remained unchanged at 52.0 in August, beating forecasts for a decline to 50.8.

The single currency shrugged off data showing that Germany’s ZEW index of economic sentiment fell sharply in August, as fears over the outlook for global growth weighed.

The greenback was also lower against the pound, with GBP/USD rising 0.36% to hit 1.6513.

Earlier Tuesday, data showed that U.K. factory orders unexpectedly rose this month, while a separate report showed that mortgage approvals hit a one-year high in July.

In addition, the greenback was lower against the yen and the Swiss franc, with USD/JPY sliding 0.33% to hit 76.54 and USD/CHF shedding 0.29% to hit 0.7878.

Earlier in the day, Japan’s Finance Minister Yoshihito Noda reiterated his “strong resolve” to protect Japan’s largely export driven economy by selling the yen.

Meanwhile, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD losing 0.33% to hit 0.9869, AUD/USD surging 0.91% to hit 1.0503 and NZD/USD jumping 1.11% to hit 0.8332.

Data released earlier showed that a preliminary reading of China’s August purchasing managers’ index edged up to 49.8 in August from a final reading of 49.3 the previous month.

A number below 50 indicates contraction in the sector, but the report lifted market sentiment, following speculation that the reading could have been much weaker.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.63% to hit 73.76.

Later Tuesday, the U.S. was to release official data on new home sales.

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