During today's Asian trading, the US dollar declined slightly against major currencies, but remains near its highest level since March 7, reached on Friday, while market participants took a wait-and-see attitude ahead of new information regarding the next round of Donald Trump's tariffs.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.08% to 104.00. Last week, the index added 0.36%, breaking a two-week decline. However, since the beginning of March, the index has fallen by 3.3% due to concerns that Trump's aggressive and unpredictable trade policy could trigger a recession in the United States. The next round of tariffs is due on April 2, when the White House will announce reciprocal levies on many countries. Meanwhile, today investors will focus on data on the US PMI indices for March, which will provide clues about the state of the economy. Consensus estimates suggest that the manufacturing PMI decreased to 51.9 from 52.7 in February, while the services PMI increased to 51.2 from 51.0.
The yen fell 0.25% against the US dollar, driven by higher yields on US Treasury bonds and weak Japanese data. The latest survey from Jibun Bank showed that the manufacturing sector continued to contract in March, and at a faster pace, the manufacturing PMI fell to 48.3 from 49.0 in February. Economists had expected an increase to 49.2. Though modest, the rate of decline was the fastest seen in a year, with firms registering steeper falls in both production and new orders. The services sector also slipped into contraction, falling to 49.5 from 53.7 in February. Consensus estimates suggested a decline to 52.9. Though marginal, it was only the fourth time that business activity had fallen in the past three years.