Dollar struggles after weak data

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TOKYO: The dollar struggled Tuesday as weak US manufacturing figures hurt demand, while euro trading was focused on the new Greek government’s attempt to win support for a renegotiation of its massive bailout.

In Tokyo, the greenback weakened to 117.25 yen, from 117.64 yen in New York.

The European single currency was nearly flat at $1.1344 from $1.1343, while it slipped to 133.01 yen from 133.43 yen.

“Some of the strong momentum in the US has probably slowed,” said Robert Sinche, a strategist at US-based Amherst Pierpont Securities.


“It’s difficult for the dollar to generate much more upside for the first half of this year.”

On Monday, the Institute for Supply Management said US manufacturing growth slowed for the third straight month in January, hampered by lower commodity prices and a slowdown at ports on the West Coast.

That came a day after separate figures showed China’s official purchasing managers index (PMI) of manufacturing activity unexpectedly retreated last month for the first time in more than two years.

And last week, the US Commerce Department said that the world’s top economy expanded at an annual rate of 2.6 percent in the fourth quarter, well below the 5.0 percent in the previous three months.

The euro, meanwhile, was steady following assurances from Greece’s leaders that the nation will abide by its financial obligations, easing concern it may lead the eurozone back into turmoil.

Greece’s prime minister and finance minister are touring Europe this week to seek support for their plans to strike a revised deal with official creditors. Premier Alexis Tsipras is seeking to repair damage after relations with his European partners suffered a rocky first week.

“There’s definitely a lot of focus on the Greek story, we’re getting mixed signals from the prime minister,” Jonathan Webb, head of foreign-exchange strategy at a unit of Jefferies International, told Bloomberg News.

“There’s room for agreement, but it could be a bit messy before we get there.”

In other trading, the Australian dollar lost almost two cents against its US counterpart, falling as low as 76.51 US cents after the Australian central bank Tuesday cut interest rates to a record low of 2.25 percent in an attempt to spur the economy.

It marked the bank’s first rate cut in 18 months.

After the initial drop, the Aussie recovered slightly to 76.68 US cents, still down from around 78 US cents before the announcement.

AFP

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