Dollar snapped winning streak as US service sectors PMI eyes recession

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Dollar snapped winning streak as US service sectors PMI eyes recession

On Friday, the 21st of February 2020, putting a kibosh on its gaining streak and safe-haven appetites, the American currency had fallen against all of the major currencies after the US IHS Markit service sectors PMI (Purchasing Managers’ Index) had been jolted to a below-fifty level that separates contraction and expansion, while US manufacturing sector PMI had barely escaped a contraction as investors’ concerns over fiscal fallouts of the fast-spreading coronavirus outbreak in China had dented demand outlook further.

On top of that, as beforementioned Friday’s (February 21st) plunge of US Dollar was almost entirely prodded by US IHS Markit PMI data that showed the US service sectors accountable for roughly two-third of entire US economic activity had contracted for the first time since 2016.

Followed by the reveal of Friday’s (February 21st) disappointing US data, the US Dollar index (DXY), measured against a basket of six major currencies in an average fell by as much as 0.53 per cent to wind down the day at 98.92, while the American currency shrugged off as much as 0.68 per cent against the euro to $1.0847 following release of a raft of upbeat Eurozone PMI (Purchasing Managers Index) data which had also beaten an analysts’ estimate by a wider margin.

Meanwhile, referring to a likely contraction ahead for the US economy after a record decade-long expansion currently at its eleventh year, a senior FX strategist at Tempus Inc., Juan Perez said on Friday’s (February 21st) market round off, “There are finally signs that the euro zone can indeed recover, perhaps slowly, and if things are going to go the way of contraction here in the U.S., that plays poorly for the buck.

” Besides, the heaviest hit in the FX market from China’s coronavirus outbreak, the Australian dollar gained 0.2 per cent to $0.6626 after dwindling to a nearly eleven-year low, while the New Zealand Dollar rounded off the day 0.41 per cent higher to $6350 and the British Pound was 0.72 per cent up against the greenback to $1.2954.