Saturday, September 30, 2023

The dollar falls globally after worrying data on the US economy

The dollar reversed its initial rise this Wednesday, August 23, falling globally according to data showing that business activity In The United States was close to breaking point in August, with the weakest growth since February as demand for new business in the huge services sector slowed.

S&P Global said its US Composite PMI, which follows the manufacturing and service sectors, fell to 50.4 in August from 52 in July, the sharpest drop since November 2022.

Michael Brown, an analyst at Trader X, said the data “poses quite a threat to the narrative of ‘American exceptionalism’ that the market has been operating on for the last two weeks.”

For months, a strong labor market and resilient consumer spending have progressively allayed recession fears and prompted upward revisions to GDP growth forecasts. However, Wednesday’s data painted a more subdued picture of the economy.

Dollar: How much is traded worldwide?

The dollar index, which compares the greenback to a basket of six major currencies, yielded up 0.06% to 103.53 units. The measure reached a high of more than two months from 103.98 before, after gloomy economic data in Europe put pressure on the euro and sterling.

The Eurozone Composite Purchasing Managers’ Index (PMI), Created by S&P Global, fell to 47 points in August and 48.6 points in July, the lowest level since November 2020. The services component fell to 48.3 from 50.9, the first time below the 50 mark, which distinguishes growth from decline this year.

The German aggregate data hit its lowest level since May 2020 as the deterioration in manufacturing output was accompanied by a renewed slowdown in service sector activity.

Euro and Pound: How Much Are They Trading Against the Dollar?

The euro weakened and peaked after the German data lowest since mid-June at $1.0802.

A similar picture emerged for the pound, which hit a level more than a week low at $1.2623 after the S&P Global/CIPS PMI slipped to 47.9 in August, its lowest level since January 2021, while the survey also showed easing price and cost pressures. The British currency later fell 0.39% to $1.2682.

World Nation News Desk
World Nation News Desk
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