Greenback struggles in wake of weak US data
The dollar faced selling pressure Thursday as a batch of weak U.S. data raised the possibility that the Federal Reserve will push back an interest rate hike beyond mid-year.
In Tokyo, the greenback briefly slipped below the 119 yen level before recovering to 119.33 yen in afternoon trade, against 119.14 yen in New York. It was above 120 yen earlier this week.
The euro lost early gains to trade at US$1.0678 from US$1.0684, while it rose to 127.49 yen from 127.29 yen in US trade.
U.S. industrial production fell 0.6 percent in March, according to the Fed, twice the decline projected by an- alysts. Also, the New York Fed said its Empire State index on manufacturing activity plunged into negative territory in April for the first time since December.
The data came on the heels of a disappointing U.S. retail sales report that had dented the dollar on Tuesday.
The U.S. unit has fallen back in the past few days as the soft figures narrow the chances the Fed will hike interest rates soon. Expectations earlier in the year had been for a rise as early as June as the world’s top economy showed signs of strength.
However, there was some good news in Fed’s Beige Book report on the state of the economy, which said it contin- ues to grow and the labour market is improving.
The dollar weakened against other Asia-Pacific currencies.
It slipped to SG$ 1.3557 from SG$1.3638 on Wednesday, to 1,088.15 South Korean won from 1,097.60 won, to 32.42 Thai baht from 32.46 baht, and to 44.42 Philippine pesos from 44.57 pesos.
The dollar also weakened to 12,857.50 Indonesian rupiah from 12,969.90 rupiah and to 62.40 Indian rupees from 62.42 rupees.
The Australian dollar rose to 77.38 U.S. cents from 75.93 U.S. cents, while the Chinese yuan eased to 19.26 yen from 19.27 yen.