Dollar Falls on Weak US Economic Data
The U.S. dollar erased early gains and closed lower after weaker-than-expected economic data showed an unexpected decline in August manufacturing production and leading indicators, marking the largest drop in 10 months and first fall in five months respectively. WTI crude oil prices fell by -1%, easing inflation concerns and potentially influencing the Federal Reserve to adopt a more accommodative monetary policy. This development was bearish for the dollar. The euro recovered from a seven-week low, supported partly by higher German producer price data and comments from ECB President Christine Lagarde suggesting stronger-than-expected economic growth in the Eurozone. The yen weakened despite a 25-basis-point rate hike by the Bank of Japan (BOJ), as two members dissented. Japanese inflation figures also came below expectations, adding to pressure on the yen.
Topics: economic indicators Fed policy oil prices USD