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Forex News: U.S. Dollar Falls On Trade, Growth Concerns

U.S. Dollar Falls On Trade, Growth Concerns

08/05/2019 - 09:59:00 (RTTNews)

(RTTNews) - The U.S. dollar declined against its major counterparts in the European session on Monday, as concerns over a global economic slowdown intensified following an escalation in US-China trade war.

Today, China's central bank allowed its yuan to fall below the politically sensitive level of seven to the U.S. dollar, fueling speculation that Beijing was allowing currency depreciation to counter U.S. President Donald Trump's latest tariff threat.

The U.S. ramped up the trade war last week, imposing a 10 percent tariff on $300 billion of Chinese goods from next month.

China has pledged to take countermeasures to the U.S. decision, thereby widening the rift.

The ISM Non-manufacturing index for July is the sole release today. The index is expected to inch up to 55.5 in July after dropping to 55.1 in June.

The greenback declined to 0.9738 against the franc, its lowest since June 28. The greenback is seen finding support around the 0.96 level.

Data from the Federal Statistical Office showed that Switzerland's retail sales grew in June.

Retail sales rose a working day adjusted real 0.7 percent year-on-year in June, after a 1.1 percent decline in May.

The greenback fell to an 11-day low of 1.1184 versus the euro from last week's closing value of 1.1106. If the greenback weakens further, it may find support around the 1.14 level.

Final data from IHS Markit showed that the euro area private sector growth softened largely due to deepening downturn in manufacturing activity in July.

The final composite output index fell to 51.5 in July from 52.2 in June. The reading came in line with the preliminary estimate.

The greenback dropped back to 1.2174 against the pound, not far from a 5-day low of 1.2188 seen at 8:45 pm ET. On the downside, 1.27 is possibly seen as the next support level for the greenback.

Data from IHS Markit showed that the UK service sector growth improved in July on renewed increase in new work.

The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index rose to 51.4 in July from 50.2 in June. The reading was forecast to rise marginally to 50.5.

The U.S. currency depreciated to more than a 7-month low of 105.79 against the yen and held steady thereafter. The pair had ended last week's trading at 106.57.

Survey results from IHS Markit showed that Japan's service sector began the third quarter with a moderate growth pace in July.

The Jibun Bank services Purchasing Managers' Index fell slightly to 51.8 in July from 51.9 in June.

The greenback retreated to 1.3212 against the loonie, on track to pierce a 4-day low of 1.3191 seen in the Asian session. The greenback is likely to face support around the 1.30 level.

The greenback eased off to 0.6771 against the aussie and 0.6535 against the kiwi, from an early more than 7-month high of 0.6748 and multi-week high of 0.6488, respectively. The next possible support for the greenback is seen around 0.715 against the aussie and 0.66 against the kiwi.

At 10:00 am ET, U.S. ISM non-manufacturing composite index for July is scheduled for release.

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