New York Foreign exchange market – economic data supported the dollar to a 2 week high
Posted by Emvertex
On Tuesday, March 5, 2019, the dollar held on to positive territory after some supportive economic data.
The ISM manufacturing index for February was 59.7, above analysts’ estimates of 57.5 and above the preliminary reading.
The ICE dollar index rose 0.2 percent to 96.831.
Elsewhere, the pound rebounded from earlier losses against the dollar. The British government did not expect any breakthrough from a meeting between British attorney general Geoffrey Fox and European Union chief negotiator Michel Barnier, foreign reports said, triggering an early slide in the pound.
Meanwhile, the bank of England said it would begin accepting euro loans from domestic Banks next week, in the latest move to shore up Britain’s financial system. The pound pared earlier losses after bank of England governor Mark Carney said in testimony in the house of lords that market expectations for British interest rates may not be high enough.
The pound bounced back to $1.3173 from today’s low of $1.3098, roughly unchanged from Monday.
The euro fell to $1.1307 from $1.1340 ahead of Thursday’s ECB meeting.
In Asian trading, China issued a slightly gloomier growth outlook, forecasting annual GDP growth of 6 percent to 6.5 percent this year. Meanwhile, the Caixin services purchasing managers’ index fell to 51.1 in February, a four-month low and below expectations of 53.3.
They are committed to keeping the yuan at an ‘equilibrium level’ and also to maintaining its stability,” said Brad Bechtel, head of fx at Jefferies.
Bechtel expects the offshore yuan exchange rate to stay in a range of 6.3 to 7 to the dollar. “keeping the rate below 7 is the key to the market, while keeping the rate above 6.2 is the key to the Chinese economy,” he said.
The dollar was roughly flat on Tuesday at 6.7074 onshore and 6.7057 offshore.
The Australian dollar briefly rose after the reserve bank of Australia left its key interest rate unchanged earlier on Tuesday and policymakers remained upbeat about the economic outlook. The Australian dollar fell 0.07 percent to $0.7087 in midday trading after falling from an intraday high.