Dollar Drifts Lower On Weak Economic Data

(RTTNews) - The U.S. dollar drifted lower on Tuesday on mild hopes the Federal Reserve might soften its rate hiking cycle after data showed U.S. private sector activity contracted for a second straight month in August.

Investors are awaiting Fed Chair Jerome Powell's speech in the upcoming Jackson Hole Symposium in Wyoming, where central bankers across the globe will update their views on inflation and policy outlook.

Data from Markit Economics showed the S&P Global US Composite PMI came in with a score of 45 for August, down from a reading of 47.7 in July.

The Manufacturing PMI fell to 51.3 in August from 52.2 a month earlier, while the Services PMI dropped to 44.1 in the month from 47.3 in July.

Data from the Commerce Department showed new home sales in the U.S. dropped 12.6% month-over-month to a seasonally adjusted 511,000 in July, the lowest reading since January 2016.

According to a report from the Federal Reserve Bank of Richmond, the Richmond Fed composite manufacturing index fell to -8 in August from 0 in the previous month.

Meanwhile, Redbook Research Inc. said that the Redbook index increased by 13.5% in the week ending August 20, 2022 over the same week in the previous year.

The dollar index dropped to 108.08 post release of the latest batch of economic data, and despite recovering to 108.52 since then, remains in negative territory with a loss of nearly 0.5%.

Against the Euro, the dollar has weakened to $0.9971 from $0.9943.

The dollar is weaker against Pound Sterling at $1.1835, easing from $1.1768. The Sterling firmed after flash survey results from S&P Global showed that the UK's services Purchasing Managers' Index came in at 52.5 in August, beating expectations for a score of 52. The reading was 52.6 in July.

Against the Japanese currency, the dollar is weak at 136.79 yen, compared to 137.51 yen Monday evening.