By Victor Reklaitis and Sara Sjolin, MarketWatch , Hiroyuki
Kachi
Tankan survey supports yen
NEW YORK (MarketWatch)--The dollar lost a little ground
Wednesday, hurt by weaker-than-expected readings on the U.S.
economy.
The ICE dollar index (DXY), which tracks the buck against its
major rivals, fell nearly 0.2%.
The euro advanced to $1.0763 from $1.0732 late Tuesday, getting
a boost from better-than-expected European manufacturing data
(http://www.marketwatch.com/story/eurozone-manufacturing-activity-picks-up-in-march-2015-04-01).
The greenback slipped against the yen, trading at Yen119.69 from
Yen120.14 late Tuesday in New York, after going on a roller-coaster
ride against the Japanese currency earlier Wednesday. The dollar
fell to as low as Yen119.42 after a lackluster reading from the
Bank of Japan's corporate-sentiment survey prompted haven buying of
the yen. This was also cited as one of the reasons U.S. stock
futures plunged (http://www.marketwatch.com/storyno-meta-for-guid)
during Asian trading hours.
What a rampaging dollar means for stocks
(http://www.marketwatch.com/story/what-a-rampaging-dollar-means-for-stocks-2015-04-01)
Despite expectations that the weak yen would improve their mood,
the BOJ tankan survey showed the main index measuring sentiment
among big manufacturers was unchanged at plus-12 from the December
poll. Economists surveyed by The Wall Street Journal and the Nikkei
had expected a reading of plus-14.
The dollar briefly recouped its losses, but then drifted back
into the red against its rivals, as disappointing U.S. economic
data weighed. ADP's report on private-sector employment fell short
of expectations
(http://www.marketwatch.com/story/private-sector-adds-189000-jobs-in-march-adp-2015-04-01-8912056),
and a manufacturing gauge missed forecasts
(http://www.marketwatch.com/story/ism-manufacturing-index-falls-in-march-to-lowest-rate-since-may-2013-2015-04-01).
The ADP release potentially doesn't bode well for the monthly U.S.
jobs report that's due Friday.
"If labor numbers now begin to turn lower as well, the positive
dollar momentum could evaporate in an instant," said BK Asset
Management's Boris Schlossberg in a note early Wednesday. The
dollar has rallied for months as investors anticipate a
strengthening U.S. economy will enable the Federal Reserve to raise
interest rates, but the greenback also has pulled back somewhat in
late March.
Read more: Fed's Lacker sees 'strong' case for June rate hike
(http://www.marketwatch.com/story/feds-lacker-sees-strong-case-for-june-rate-hike-2015-03-31)
Upcoming holidays also had an impact on trading on Wednesday,
"as liquidity begins to slip away from the foreign-exchange market,
not to return until April 7," analysts at BBH said in a note. The
U.S. stock market will be closed on Good Friday
(http://www.marketwatch.com/story/when-do-markets-close-for-good-friday-2015-03-27),
and exchanges in Europe are set to remain closed on Easter Monday
as well.
In U.K. economic news, manufacturing activity rose in March, but
it wasn't enough to send the pound higher. Sterling (GBPUSD)
exchanged hands at $1.4819, roughly were it was late Tuesday.
"The U.K. election is the biggest hurdle for the pound, and as
long as the threat of the U.K. leaving the EU remains on the table,
the upside is very limited for the currency," said Naeem Aslam,
chief market analyst at AvaTrade in a note.
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