The dollar index (DXY00) today added to last Friday’s losses and is down by -0.43%. The dollar is falling today on negative carryover from last Friday’s weaker-than-expected US payroll and ISM manufacturing reports, which bolstered speculation that the Fed may cut interest rates as soon as next month. Also, questions about Fed credibility are weighing on the dollar after Fed Governor Adriana Kugler resigned last Friday, which could prompt President Trump to nominate a new governor who is more dovish and could undermine Fed Chair Powell’s influence. Strength in stocks today has also reduced liquidity demand for the dollar.
US June factory orders fell -4.8% m/m, right on expectations and the biggest decline in more than 5 years. However, June factory orders ex-transportation rose +0.4% m/m, stronger than the expectations of +0.3% m/m and the largest increase in 7 months.
