FOREX-Dollar skids to two-week low after soft U.S. data, trade concerns


Warning: This material has been prepared by a third party company, Reuters, which is independent of Davy. Davy has not reviewed the material and accepts no responsibility for errors or omissions, or for the information or opinions contained therein. It does not constitute investment advice.

    * U.S. to restore tariffs on steel import from Brazil,
    * U.S. ISM manufacturing in November contracts for a fourth
    * U.S. construction spending falls in October
    * Graphic: World FX rates in 2019 

 (Adds comment, trade news, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Dec 2 (Reuters) - The dollar dropped to two-week
lows on Monday after data showed the U.S. manufacturing sector
shrank for a fourth straight month in November and construction
spending fell unexpectedly, stoking fears the world's largest
economy could slip into recession.
    The greenback also dropped from six-month highs against the
Japanese yen and slid to a two-week trough versus the euro.
    Before the U.S. data's release, the dollar had already
weakened earlier, after U.S. President Donald Trump on Monday
announced he would restore tariffs on U.S. steel and aluminum
imports from Brazil and Argentina in apparent retaliation for
currency weakness he said was hurting U.S. farmers.*:nL8N28C2M8
    "It's a combination of both trade concerns and weak U.S.
data," said John Doyle, vice president of dealing and trading,
at Tempus Inc in Washington, explaining Monday's dollar move.
    "The dollar was already weakening before the data, but the
weakness accelerated when the manufacturing numbers came out. It
didn't help that manufacturing reports out of Europe were
beating expectations and ours were awful," he added.
    Positive data from European manufacturing early Monday
fueled optimism on the region's outlook. Manufacturing figures
from the UK, Germany, Spain and France all beat expectations.*:nL8N28C22O
    In contrast, the U.S. Institute for Supply Management's
(ISM) index of national factory activity fell to 48.1 in
November from 48.3 in October, down for a fourth month. The
reading was below expectations of 49.2 from a Reuters poll of 57
    A separate report showed U.S. construction spending in
October dropped as well, falling 0.8% as investment in private
projects tumbled to the lowest level in three years.*:nL1N2890MD
    "What this means for the dollar is that we could potentially
see another rate cut from the Federal Reserve next year," said
Karl Schamotta, chief market strategist at Cambridge Global
Payments in Toronto.
    The Fed has cut interest rates three times this year and at
its last monetary policy meeting it signaled it would be
data-dependent going forward.
    In afternoon trading, the dollar index  .DXY  was last down
0.4% at 97.839 after dropping to 97.811, a two-week low.
    The drop in the dollar index pushed the euro to a two-week
high. It was last up 0.6% at $1.1081  EUR= .
    The dollar fell 0.4% to 108.98 yen  JPY=  after hitting
108.94, the lowest since May.
    Earlier in the session the greenback gained against the yen
after an unexpected rebound in Chinese manufacturing activity
lifted hopes for a brighter outlook for world growth. 
    Chinese factory activity expanded at the quickest pace in
almost three years in November, a private business survey showed
on Monday, following upbeat official data over the weekend.*:nZUN83QI03*:nL4N2891KL

New Zealand dollar
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler
and Richard Chang)
 ((; 646-223-6322; Reuters
Messaging: rm://

Warning: This content may be provided by regulated and unregulated entities and is not created, reviewed or endorsed by Davy. It is provided for general information purposes only and does not constitute a recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision. Importantly, it does not constitute investment advice, as it does not contemplate the personal circumstances of any particular person or group of persons. Neither Davy nor the providers of the Third Party Content will be liable for any investment decision made based on the reliance on or use of such data, or any liability that may arise due to delays or interruptions in the delivery of the Third Party Content for any reason.