Investing.com - The dollar traded steady to lower against most major global currencies on Tuesday as hopes began to build that the European Central Bank is coming closer to announcing plans to buy sovereign debt to lower borrowing costs in countries such as Italy and Spain.
The U.S. will release its August jobs report on Friday, and concerns the number will disappoint and spark a round of Fed stimulus measures pressured the greenback lower in choppy trading.
In Asian trading on Monday, EUR/USD was up 0.17% at 1.2613.
Fed Chairman Ben Bernanke said in a widely anticipated speech last week that the U.S. central bank remains ready to intervene with stimulus measures should an already tepid recovery fail to show sustained improvement, especially in the labor market.
Investors interpreted the news to mean the Fed is growing increasingly willing to roll out a third round of quantitative easing, which sees the U.S. central bank buying bonds held by financial institutions to pump liquidity into the economy with the aim of pushing down borrowing costs and encouraging investing and hiring.
Under quantitative easing, the dollar weakens, while gold, stocks and higher-yielding currencies strengthen.
The U.S. will release its August jobs report on Friday, and investors were on edge, jumpy over concerns that weak numbers will prompt the Fed to announce plans to intervene at its next monetary policy meeting on Sept. 11-12.
The U.S. economy added a net 163,000 jobs in July, 64,000 jobs in June and 87,000 in May, according to the Bureau of Labor Statistics, which many investors feel does not represent the sustained recovery in the labor market that Fed officials would like to see.
Meanwhile, investors continued to expect the European Central Bank to announce plans to buy sovereign debt in countries such as Italy and Spain.
ECB President Mario Draghi told European lawmakers earlier he felt comfortable buying bonds carrying three-year maturities.
Soft European manufacturing data, however, cushioned the dollar's declines.
Revised data released earlier revealed the eurozone’s manufacturing sector contracted for the 13th consecutive month in August.
The Markit research firm reported earlier the eurozone's manufacturing purchasing managers’ index rose to 45.1 from July's 37-month low of 44 but fell short of analysts' calls for a 45.3 reading.
The reading came in well below the 50 mark that separates growth from contraction.
Markit also reported that Germany's manufacturing purchasing managers' index hit 44.7, below analysts' calls for 45.1 reading.
Elsewhere, the Australian Bureau of Statistics on Monday reported that retail sales contracted 0.8% in July following a 1.2% increase in June, whose figure was revised up from 1.0%.
Analysts had expected Australian retail sales to rise 0.2%.
The news fueled sentiments the Australian economy may be facing headwinds from abroad, especially in China, where once red-hot growth continues to cool.
The Chinese HSBC Manufacturing PMI disappointed investors this week, hitting 47.6 in August, a tenth successive month-on-month deterioration in Chinese manufacturing operating conditions and the lowest reading since March 2009.
The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.07% at 1.5898.
The dollar was up against the yen, with USD/JPY trading up 0.17% at 78.39, and down against the Swiss franc, with USD/CHF trading down 0.25% at 0.9512.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.03% at 0.9855, AUD/USD down 0.04% at 1.0244 and NZD/USD up 0.06% at 0.7981.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.13% at 81.07.
Later Tuesday, the U.S. will release a report by the Institute for Supply Management on manufacturing PMI.
The U.S. will release its August jobs report on Friday, and concerns the number will disappoint and spark a round of Fed stimulus measures pressured the greenback lower in choppy trading.
In Asian trading on Monday, EUR/USD was up 0.17% at 1.2613.
Fed Chairman Ben Bernanke said in a widely anticipated speech last week that the U.S. central bank remains ready to intervene with stimulus measures should an already tepid recovery fail to show sustained improvement, especially in the labor market.
Investors interpreted the news to mean the Fed is growing increasingly willing to roll out a third round of quantitative easing, which sees the U.S. central bank buying bonds held by financial institutions to pump liquidity into the economy with the aim of pushing down borrowing costs and encouraging investing and hiring.
Under quantitative easing, the dollar weakens, while gold, stocks and higher-yielding currencies strengthen.
The U.S. will release its August jobs report on Friday, and investors were on edge, jumpy over concerns that weak numbers will prompt the Fed to announce plans to intervene at its next monetary policy meeting on Sept. 11-12.
The U.S. economy added a net 163,000 jobs in July, 64,000 jobs in June and 87,000 in May, according to the Bureau of Labor Statistics, which many investors feel does not represent the sustained recovery in the labor market that Fed officials would like to see.
Meanwhile, investors continued to expect the European Central Bank to announce plans to buy sovereign debt in countries such as Italy and Spain.
ECB President Mario Draghi told European lawmakers earlier he felt comfortable buying bonds carrying three-year maturities.
Soft European manufacturing data, however, cushioned the dollar's declines.
Revised data released earlier revealed the eurozone’s manufacturing sector contracted for the 13th consecutive month in August.
The Markit research firm reported earlier the eurozone's manufacturing purchasing managers’ index rose to 45.1 from July's 37-month low of 44 but fell short of analysts' calls for a 45.3 reading.
The reading came in well below the 50 mark that separates growth from contraction.
Markit also reported that Germany's manufacturing purchasing managers' index hit 44.7, below analysts' calls for 45.1 reading.
Elsewhere, the Australian Bureau of Statistics on Monday reported that retail sales contracted 0.8% in July following a 1.2% increase in June, whose figure was revised up from 1.0%.
Analysts had expected Australian retail sales to rise 0.2%.
The news fueled sentiments the Australian economy may be facing headwinds from abroad, especially in China, where once red-hot growth continues to cool.
The Chinese HSBC Manufacturing PMI disappointed investors this week, hitting 47.6 in August, a tenth successive month-on-month deterioration in Chinese manufacturing operating conditions and the lowest reading since March 2009.
The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.07% at 1.5898.
The dollar was up against the yen, with USD/JPY trading up 0.17% at 78.39, and down against the Swiss franc, with USD/CHF trading down 0.25% at 0.9512.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.03% at 0.9855, AUD/USD down 0.04% at 1.0244 and NZD/USD up 0.06% at 0.7981.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.13% at 81.07.
Later Tuesday, the U.S. will release a report by the Institute for Supply Management on manufacturing PMI.