The US dollar dropped today against the euro to the lowest level since March, and also fell against all other major currencies, on the speculation that additional stimulus is required to support the US economy and after the report showed that the manufacturing growth slowed.
The Institute for Supply Management Purchasing Managers’ Index declined to 54.4 in September from 56.3 in August. The report stated:
While the headline number shows relative strength this month as the PMI reading of 54.4 percent is still quite positive, the overall picture is less encouraging.
The slower manufacturing supports the outlook of the Federal Reserve for the modest economic growth. Charles Evans, the president and the chief executive officer of the Federal Reserve Bank of Chicago, voiced his opinion:
We still have a long road ahead before we catch up to the level of activity we would have achieved in the absence of the crisis, or any other shock.
The Dollar Index, which tracks the dollar against its six major counterparts, fell 5.4 percent in September, the biggest monthly drop since May 2009.
EUR/USD rallied from 1.3634 to 1.3779 today as of 20:13 GMT. GBP/USD went up from 1.5714 to 1.5833, following the advance to the intraday high of 1.5871. USD/JPY traded at 83.30 after it fell from the opening rate of 83.50 to the intraday low of 83.14.
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