Dollar drops as weak data sinks US rate hopes
THE dollar slumped in Asia yesterday as another weak batch of US data all but hammered any chance of the Federal Reserve hiking interest rates this month.
The Institute for Supply Management said its US non-manufacturing purchasing managers’ index (PMI) – a key reading of the all-important US service sector – had dived to its lowest level in more than six years.
The data follows figures showing a slowdown in jobs creation and factory activity, hitting hopes that the world’s top economy was strong enough to withstand higher borrowing costs.
“The trifecta of terrible ISM manufacturing and non-manufacturing PMIs and weaker-than-expected non-farm payrolls have left the quixotic calls for a September rate hike dead in the water,” Angus Nicholson, a market analyst in Melbourne at IG Ltd, said.
“This is no longer a September story – for even a December rate hike to occur both ... PMIs are going to have to stage quite a rapid recovery in the next month or so.”
In Tokyo, the dollar dropped to 101.39 yen from 101.99 yen in New York and well off the 103.60 yen on September 6.
The greenback also slumped more than 1 percent to a near oneyear low against the South Korean won, while it was also sharply down against the Australian and Singapore dollars, the Indonesian rupiah and the Turkish lira. –
Tourists walk along the seafront near the Sydney Opera House. Australia’s economy grew by 0.5 percent in the June quarter with an upswing in government spending offsetting a fall in net exports as the nation marked 25 years of unbroken economic expansion.