The USD Declines Ahead of US Manufacturing Data

By TraderVox.com

Tradervox.com (Dublin) – The dollar opened the trading weaker after speculation that the Manufacturing data report will show that the manufacturing in the country increased in February. This has caused the greenback declined against major counterparts as the appetite for safe haven asset reduced. The Australian and the New Zealand dollar were the biggest gainers against the greenback. The International Swaps & Derivatives Association indicated that there would be no payout on the $3.25 billion in Greek credit default swaps. The Fed chairman Ben Bernanke said this yesterday as he testified before Congress, but he did not indicate whether there is any further monetary easing consideration.

A Currency Strategist at Deutsche Bank AG in London, Henrik Gullberg said that the signs of economic recovery would benefit the higher-yielding currencies as opposed to the dollar, since this would increase risk appetite. However, he was quick to add that some investor are reassessing comments by Bernanke yesterday in efforts to get clues on whether there is another looming round of quantitative easing.

The dollar declined against the Australian dollar by 0.3 percent to settle at $1.0762. The dollar did not show any considerable changes against the euro as it remained at $1.3332 per euro.  However, the dollar declined against the yen by 0.2 percent to settle at 81.02 per dollar. On the other hand, euro declined 0.2 percent against the sterling pound to sell at 83.55 pence and traded at 108.01 against the yen.

According to Bloomberg Correlation-Weighted Indexes, the US dollar was the worst performer today, falling by up to 0.2 percent. According to the Institute for Supply Management’s index in US, the index rose to 54.5 which are the highest it has been in eight months. This was an increment from 54.1 recorded in January. According to economic analysts, reading above 50 is an indication of growth in the economy. Investors are also waiting for another report to be released later today which will show that US personal spending increased by 0.4 percent in January.

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