Dollar Up, China’s Services Sector Grows at Slower Pace in May By Investing.com

Dollar Up, China’s Services Sector Grows at Slower Pace in May By Investing.com


© Reuters.

By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia as investors digested , while awaiting key U.S. economic data for clues on the economic outlook and the U.S. Federal Reserve’s policy decision.

The that tracks the greenback against a basket of other currencies inched up 0.14% to 90.023 by 1:50 AM ET (5:50 AM GMT).

The pair edged up 0.12% to 6.3882. Investors continue to monitor shifts in Chinese policymakers’ stance on the currency after the People’s Bank of China tightened its Banks’ forex requirements earlier this week to curb the yuan’s surge.

Data released earlier in the day said May’s was 55.1, indicating a slower growth rate in the services sector in China.

The pair was up 0.21% to 109.78 as services PMI fell to 46.5 in May in Japan, according to data released earlier in the day.

The pair was down 0.26% to 0.7732 after data released earlier in the day said Australia’s increased 1.1% month-on-month in April. Across the Tasman Sea, the pair fell 0.28% to 0.7216.

The pair edged down 0.11% to 1.4152 as investors await the U.K.’s data in May, due later in the day.

Investors are betting on a falling dollar driven by the world’s ongoing economic recovery from COVID-19. However, they remained concerned that the Fed could change its current dovish monetary policy due to a strong economic rebound.

“The major pairs (are) still stuck within ranges,” analysts at Singapore’s OCBC Bank in a note. However, they added that yield differentials seem to be moving in the dollar’s favor and that policymakers’ tone is subtly changing.

Fed Governor Lael Brainard’s noting of risks to both sides of the central bank’s goals gave “another signal that the Fed is slowly moving away from its excessively dovish stance… (we) retain the view that Fed expectations should be gradually built in from here, barring any key data misses this week,” the note said. 

Remarks from Brainard earlier in the week noted risks to both sides of the Fed’s goals offered “another signal that the Fed is slowly moving away from its excessively dovish stance,” the note added.

The Fed said on Wednesday that it plans to start gradually sell a portfolio of corporate debt purchased through an emergency lending facility that it launched in 2020, indicating the beginning of policy change.

Investors now await key U.S. economic data including , due later in the day, for clues on the economic outlook. Further data include , released on Friday, which posted weaker-than-expected monthly hiring in April.

“Given last month’s disappointing report, the risk is the results deliver another downside surprise and bears down on the dollar,” Commonwealth Bank of Australia (OTC:) analyst Carol Kong told Reuters.

Across the Atlantic, investors will focus on the European Central Bank meeting, scheduled for the following week, for clues on whether policymakers will pare back their bond-buying program.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply