The dollar weakened against its peers today however losses were curtailed following the release of figures on US manufacturing. The Institute for Supply Management reported that its purchasing managers index dropped from 59.0 in October to 58.7 in November while pundits had forecast a decrease to 57.9. The dollar retained some demand following the recent selloff in oil where prices plummeted over 2%.
The euro strengthened against the dollar following data which revealed that the manufacturing index for the euro zone dropped to 50.1, where a reading of 50 borderlines expansion and decline. The manufacturing PMI for Germany fell below 50 to 49.5 marking a 17 month low. French manufacturing PMI stayed at 48.4 while Italy’s registered at 49.0.
The pound strengthened against the dollar coming off a 14 month low following figures which revealed that UK manufacturing activity for November jumped to its highest level in 4 months which lessened fears that UK economic recovery is lagging. Other figures revealed that UK net personal lending increased by 2.6 billion pounds in October from an increase of 2.7 billion in September. The pound was stronger against the euro.
The yen weakened against the dollar with the pair breaking its 119 handle trading at 7 year highs on the back of an assessment from Moody’s which saw Japan’s sovereign debt rating lowered by one level to A1. The downgrade followed Prime Minister Abe’s decision to postpone a scheduled sales tax increase which indicated Japan’s potential inability to lower its fiscal deficit.
The New Zealand and Canadian dollars strengthened against the dollar while the Australian dollar weakened. The Aussie dollar reached 4 year lows following numbers which revealed that China’s manufacturing sector grew at an 8 month low in November.
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