Dollar Hit By Disappointing US Data

TOKYO, (UrduPoint / Pakistan Point News - 10th Augst,2016) - The Dollar sank Wednesday in Asia as disappointing US data poured cold water on the chances of a US interest rate hike this year. The greenback lost ground against its major peers and emerging currencies, as investors reacted to news that US second-quarter productivity had fallen 0.5 percent. The result marks a decline for the third consecutive quarter.

The US unit had risen at the start of the week after figures on Friday showed the world's top economy added more jobs than expected last month. "Higher-yielding currencies are leading the charge, stoked by booming risk appetite," Stephen Innes, senior trader at OANDA Asia Pacific, said in a commentary. "The market is buying into the underlying premise that the US economy is robust, but not churning at sufficient levels to warrant any immediate policy response," Innes said.

In Wednesday trading, the dollar changed hands at 101.23 yen, down sharply from 101.88 Yen in New York and 102.44 yen in Tokyo earlier Tuesday. The euro rose to $1.1154 from $1.1115 in US trade, while falling to 112.90 yen from 113.25 yen. On Friday, the Labor Department said the US economy added 255,000 jobs in July, beating analyst forecasts for an increase of 185,000 payrolls, while also upgrading employment estimates for the prior two months.

The figures had boosted expectations that the Federal Reserve would lift borrowing costs this year. Against the dollar, the South Korean won soared 0.7 percent, and the Taiwan dollar and Malaysian Ringgit both tacked on 0.5 percent, while the Thai Baht, Singapore dollar, Philippine peso and Indonesia's rupiah also booked healthy gains. The pound rose to $1.3085 from $1.3000 in US trade.