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Weekly Roundup: Disappointing service sector performance fuels US dollar losses

currency-newsWeekly Roundup: Disappointing service sector performance fuels US dollar losses
While the Markit PMIs are afforded less attention than the more established ISM surveys the surprise decline in February’s services reading left the US dollar on the back foot.

As the PMI plunged from 53.4 to 49.4 this undermined confidence in the health of the world’s largest economy, highlighting the negative impact of recent global disruption.

Nevertheless, the US dollar soon returned to a positive footing against its rivals as anxiety over the spread of Covid-19 saw a major resurgence over the weekend.

With significant outbreaks occurring in Italy and South Korea fear of a further slowdown in global growth encouraged investors to pile back into the safe-haven currency.

With forecasts pointing towards a strong monthly recover in durable goods orders further gains could be in store for USD exchange rates this week.

As long as US manufacturing shows signs of holding up in the face of weaker international trade the potential for US dollar losses could prove limited.

Increasing signs of dovishness in comments from Federal Reserve policymakers may put a dampener on the US dollar over the course of the week, though.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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