Dollar advances and euro moves away from parity

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The dollar appreciated on Tuesday, after a report on the US services sector in August reinforced views that the economy is not in a recession, while the euro and the yen – a currency sensitive to interest rates – continued to decline.

* The dollar index gained 0.557% after the Institute for Supply Management (ISM) said its non-manufacturing PMI rose to a reading of 56.9 last month from 56.7 in July, the second consecutive monthly increase. after three months of declines.

* “People acknowledge that the US economy is slowing down, but it’s still the least ugly of the contest,” said Marc Chandler of Bannockburn Global Forex. Although the dollar’s path of least resistance is to the upside, its strength will be challenged next week when the US Consumer Price Index for August is released, Chandler said.

* Sterling and the euro were attempting to recover from multi-year lows hit on Monday against the dollar. The British currency improved 0.04% to $1.1528, and the community fell 0.26% to $0.99.

* Central bank rate hikes are commanding the attention of currency markets, with the Bank of Japan (BoJ) standing out at the Jackson Hole symposium as the only one remaining determined to maintain an accommodative monetary policy, HSBC said in a statement. a note.

* The dollar-yen exchange rate correlation with US Treasury bond yields has picked up to approach its strongest level so far this year, HSBC said. The bank changed its forecast for parity to 144 at the end of the third quarter, from 140 previously.

* The yen weakened further, losing 1.48% to 142.71 per dollar. The greenback has risen 24% against the Japanese currency so far this year.

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* In China, authorities’ efforts to curb the yuan’s recent depreciation were unsuccessful and it hit a new two-year low of 6.9784 units in offshore operations.

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