The dollar traded lower on Monday, July 17, 2023. It suffered its worst weekly drop of the year. Traders awaited economic data and policy decisions. They wanted to see if the dollar would sell further. The greenback was down 0.3% against a basket of currencies. The euro was up 0.2% to $1.0250.
The yen was also stronger, up 0.1% to 135.25 per dollar. Investors were waiting for Chinese economic data. The data could provide direction for the dollar. China’s manufacturing activity is expected to have slowed in July. This is according to a Reuters poll.
The dollar was under pressure from lower U.S. Treasury yields. The benchmark 10-year Treasury yield was down 2 basis points to 1.56%. Michael Hewson, chief market analyst at CMC Markets, said the dollar is still under pressure. They are waiting for more data before seeing any real direction.
Other factors that could affect the dollar are:
The release of U.S. economic data, including the July jobs report and the second-quarter GDP growth figures. The outcome of the European Central Bank’s policy meeting on Thursday. The progress of the U.S.-China trade talks. Overall, the dollar is likely to remain under pressure in the near term. Investors continue to focus on risks to the global economy. However, the currency could find support if U.S. economic data exceeds expectations.
