Dollar weakens against major currencies After the US revealed weak economic numbers today.
The dollar was also pressured by forecasts that The Federal Reserve (Fed) will slow down the strength of interest rate hikes until the end of the year. before cutting interest rates in March next year
As of 12:34 AM PST, the dollar was 0.99% to 131.86 yen, while the euro was down 0.62% to 135.23 yen and rebounded 0.37% to $1.026. The index measures the dollar’s movements against six major currencies in a basket of currencies, minus 0.45% to 105.43.
The Institute for Supply Management (ISM) said its manufacturing index fell to 52.8 in July, the lowest level in two years since June 2020. But it was higher than analysts’ estimates of 52.0 from 53.0 in June.
The manufacturing index was hit by a contraction in new orders. This was the second straight month of contraction, while employment contracted for the third month.
The US Commerce Department said Construction spending fell 1.1% in June from month to month. Analysts had forecast a 0.1% increase after a 0.1% gain in May.
Investors expect The Fed is likely to slow interest rate hikes at the remaining three monetary policy meetings this year. before cutting interest rates in March next year
The CME Group’s FedWatch Tool showed investors weighed 68.5 percent on the Fed’s rate hike of 0.50% at its meeting on September 20-21 and weighted 63.3% on the Fed’s rate hike of 0.25%. At its meeting on Nov. 1-2 and weighted 49.50%, the Fed will raise interest rates by 0.25% at its meeting on Dec. 13-14.
In addition, investors weighed 46.5 percent that the Fed would keep interest rates unchanged at its meeting on Jan. 31st – Feb. 1, 2023.
At its March 14-15 meeting, investors weighed 33.1 percent that the Fed would cut interest rates by 0.25%.