USD Sinks On Manufacturing Collapse And Powell Comments

The US dollar was on the back foot in Asia session trading as traders digest the collapse in US manufacturing and cautionary comments from Federal Reserve Chairman Jerome Powell. The euro was the biggest beneficiary with the EURUSD exchange rate surging to a new 31-month high.

USD sinks on manufacturing collapse and Powell comments

Data from November showed that US manufacturing expanded at a much slower pace than expected while coming off its two-year high. While the gauge of factory activity came in at 57.5, the median estimate of Bloomberg economists was 58. Nonetheless, a reading above 50 does indicate growth.

US Federal Reserve Chairman Jerome Powell cautioned lawmakers in the US on the uncertainty and economic damage that still remains even with the coronavirus vaccine. The US dollar has been one of the weakest currencies in recent months with the US Dollar Index collapsing nearly 12% from its March highs.

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