Dollar Strengthens Against Major Currencies
The US dollar index strengthened by around 0.1% to 99.90 on Monday (August 3rd), approaching the psychological level of 100.00. The strengthening occurred after US manufacturing data showed that economic activity was still growing strongly, opening the possibility for the Fed to maintain its tight interest rate policy.
The US ISM Manufacturing PMI rose to 55.6 in July from 53.3, beating the 54.0 forecast. The new orders index increased to 56.7, while the price index fell to 71.1 from 73.0, but still indicated high production cost pressures.
The euro weakened by around 0.2%, sending EUR/USD down to around 1.1510. The rise in US bond yields following the ISM data prompted dollar buying, although the euro remained above the key 1.1500 level.
The pound sterling was one of the most pressured currencies. GBP/USD fell around 0.4% to 1.3430, while AUD/USD weakened 0.5% to around 0.6990, falling back below the psychological level of 0.7000.
In contrast to other currencies, the yen remained strong. USD/JPY fell around 0.4% to 156.90 as the market remained reluctant to sell the yen again following Japan's intervention and the threat of further action from authorities.
Newsmaker Analysis: The dollar has the potential to maintain its strength if US economic data remains solid and yields rise again. However, the DXY 100.00 area poses a significant obstacle. Meanwhile, the threat of Japanese intervention could keep USD/JPY under pressure even as the dollar strengthens against other major currencies. (arl)
Source: Newsmaker.id
