Dollar retreats after weak US factory production data


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By Karen Brettell

NEW YORK (Reuters) – The dollar plunged on Monday after data showed production at U.S. factories fell the most in seven months in September, erasing earlier gains on expectations the Federal Reserve could be closer to raise interest rates than expected.

US manufacturing production has been hit https://www.reuters.com/world/us/us-manufacturing-output-declines-september-2021-10-18 as a continuing global semiconductor shortage has reduced production of motor vehicles, providing further evidence that supply constraints hamper economic growth.

The supply disruptions add to concerns about high inflation and expectations that the US central bank will have to act to stem the price hikes.

“The prospect of global central banks being more aggressive to counter growing inflation fears could put pressure on the US dollar, although the Fed in turn may act sooner than expected, in favor of the dollar,” Ronald said. Simpson, Managing Director of World Currency. analysis, at Action Economics.

The dollar lost 0.02% to 93.95 against a basket of currencies. It had previously hit 94.17 as US Treasury yields rose.

The New Zealand dollar appreciated after data showed the country was facing its strongest price pressures in a decade.

It was last at $ 0.7081, after hitting a one-month high at $ 0.7105.

The British pound briefly hit a 20-month high against the euro after Bank of England Governor Andrew Bailey sent another signal that the central bank was preparing to raise interest rates as inflation risks are increasing.

The euro climbed 0.24% against the British pound to 0.8455, having previously fallen to 0.8427.

The euro rose 0.11% to $ 1.1610, after falling earlier to $ 1.1570. It has fallen 5% this year.

Bank of America analysts noted on Monday that commodity-linked currencies, including the Norwegian krone and the Canadian and Australian dollars, had been the best performers since the summer with rising energy prices, while the euro and the yen had been the worst.

The yen was close to a new three-year low, with the dollar rising 0.01% to 114.27 yen, close to Friday’s 114.46 level that was last reached in October 2018.

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Currency bid prices at 3:14 p.m. (1914 GMT)

Description RIC Last closure US Pct Change YTD Pct High Bid Low Bid

Previous modification

Session

Dollar index 93.9540 93.9750 -0.02% 4.415% +94.1740 +93.8660

Euro / Dollar $ 1.1610 $ 1.1599 + 0.11% -4.97% +1.1622 $ +1.1572

Dollar / Yen 114.2700 114.2000 + 0.01% + 10.57% +114.4450 +114.0300

Euro / Yen 132.66 132.52 + 0.11% + 4.52% +132.7800 +132.1600

Dollar / Switzerland 0.9232 0.9231 + 0.02% + 4.36% +0.9273 +0.9224

Pound sterling / dollar $ 1.3727 $ 1.3745 -0.12% + 0.48% +1.3764 $ +1.3710

Dollar / Canadian 1.2379 1.2359 + 0.15% -2.80% +1.2409 +1.2350

Aussie / Dollar $ 0.7414 $ 0.7419 -0.03% -3.59% + $ 0.7436 + $ 0.7379

Euro / Switzerland 1.0717 1.0706 + 0.10% -0.83% +1.0735 +1.0704

Euro / Sterling 0.8455 0.8435 + 0.24% -5.39% +0.8463 +0.8425

NZ $ 0.7081 $ 0.7072 + 0.12% -1.40% + $ 0.7105 + $ 0.7040

Dollar / Dollar

Dollar / Norway 8.4270 8.4235 + 0.00% -1.90% + 8.4830 + 8.4145

Euro / Norway 9.7846 9.7768 + 0.08% -6.52% +9.8192 +9.7433

Dollar / Sweden 8.6654 8.6030 + 0.73% + 5.72% +8.6710 +8.6073

Euro / Sweden 10.0610 9.9878 + 0.73% -0.14% +10.0666 +9.9845

(Additional reporting by Saikat Chatterjee in London; Editing by Paul Simao)

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