US dollar weaker against euro, sterling; Asian currencies weaker on high oil prices

Story link: US dollar weaker against euro, sterling; Asian currencies weaker on high oil prices

At midday in New York on Wednesday, the US dollar was down in relation to both the euro and sterling. This weakness was partly due to an unexpected decline in business confidence in the US. The Chicago Purchasing Manager’s index was down to 49.2 in August, well below the expected level of 61.5 and far below July’s figure of 63.5.

Another factor was the released of Commerce Department data that showed the US GDP growing at an annual rate of 3.3 percent in the second quarter, down from 3.8 percent growth in the first quarter. Additionally, the minutes of August’s meeting of the Federal Open Markets Committee were released, doing nothing to contradict the impression that the Federal Reserve will continue to raise US interest rates for the time being.

The US dollar dropped 0.7 percent to $1.23 in relation to the euro, and also fell 0.7 percent against sterling, to $1.798.

The yen was also down as investors worried about how climbing crude oil prices will effect Japan’s highly oil-dependent economy. Another factor in the yen’s weakness was a 1.1 percent decline in industrial production in Japan, at least partly due to slowed growth in exports.

The yen lost 0.5 percent to ¥136.60 in relation to the euro, and was also down 0.5 percent to ¥199.85 against sterling. The Japanese currency was flat in midday trade against the US dollar, at ¥111.20.

Fuel prices were instrumental in the decline of other Asian currencies against the US dollar. The Korean won lost 0.2 percent to Won1,036.70 in relation to the US dollar, while the Taiwan dollar also declined by 0.2 percent against the dollar, to T$32.720.