DOLLAR WEAKENS AS US STOCKS SELL OFF ON STRONG NAPM DATA
12:38 EDT 08/31
NEW YORK (MktNews) - The dollar retreated to session lows vs. the yen and the euro mid-day Tuesday weighed down by weakness in U.S. asset markets after the surprise early release of fairly strong August National Association of Purchasing Managers report, traders said.
The August NAPM index rose slightly to 54.2 vs. July's 53.4 but participants focused on very high prices paid and employment components, traders said. The prices component of NAPM rose to a robust 59.8, the highest level since June 1995, adding inflation worries to the economic outlook, analysts said. The employment component also rose a strong 53.4 from 49.6. The NAPM was originally set for release on September 1.
The U.S. stock and bond markets, already soft, were dragged lower by the report and that heavily weighed on the dollar, traders said. Dollar-yen fell to session lows around Y109.10 and euro-dollar briefly broke above $1.0600 reflecting the weakness in U.S. assets, traders said.
There are light euro-dollar stop-loss buy orders at $1.0625 and dollar-yen stop-loss sell orders at Y109.00, Y108.80 and Y108.50, traders said earlier.
Earlier, dollar-yen hovered around Y109.70 buffeted by conflicting flows, traders said. A U.S. investment bank bought a good amount of dollar-yen, believed to be on behalf of an Asian account, but a different investment bank was a persistent dollar-yen seller and effectively capped the pair, traders said. |
