Dollar Retreats Over Glow From Positive Europe Data

The dollar wobbled before retreating on Wednesday morning in Asia. Investors increased their risk appetite earlier in the day after Europe and the U.S. released positive data on Tuesday.

IHS Markit’s Composite Purchasing Managers’ Index for June surpassed expectations, jumping to 47.5 from the 42.4 mark predicted in forecasts prepared by Investing.com. The figure also well exceeding May’s 31.9.

Although short of the 50-mark indicating growth, the better than expected figures, alongside similarly upbeat data from the U.K. and the U.S., gave investor sentiment a boost.

But investors are also continuing to keep a wary eye on the ever-increasing number of COVID-19 cases and the impact on the global economic recovery.

There are over 9.2 million cases globally as of June 24, according to Johns Hopkins University data.

Meanwhile, investors are also continuing to monitor simmering U.S.-China tensions. Although White House trade advisor Peter Navarro quickly clarified his comment that its trade deal with China was “over” by stressing that phase one of the deal was still intact, the confusion still sent markets on a wild rollercoaster ride.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.02% to 96.590 by 11:42 PM ET (4:42 AM GMT).

The USD/JPY pair was down 0.6% to 110.14.

The AUD/USD pair gained 0.21% to 0.6944 and the NZD/USD pair slid 0.22% to 0.6474. The Reserve Bank of New Zealand said earlier in the day that with the balance of economic risks remaining on the downside, it is prepared to use additional stimulus measures where necessary.

The USD/CNY pair gained 0.17% to 7.0694 and the GBP/USD pair slid 0.01% to 1.2517, giving up some of its earlier gains.