Forex: The Dollar retreats after weak PMI and tensions in the Middle East

© Reuters. – The u.s. dollar remained close to its lowest levels in three months Friday, because of the rising tensions between Iran and the United States and of the PMI index was weaker than expected, which has kept the dollar lower.

The dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.1 percent to 96,047 at 1655 hours.

Weaker data on the manufacturing sector on Friday increased support for rate cuts from the Fed in July, the index’s preliminary purchasing managers from Markit sliding toward the threshold of contraction of 50.

The central bank announced on Wednesday that it would be willing to reduce rates in order to combat the slowdown in global growth and the slowdown of the inflation, the investors providing for a decrease in the rate to 100% in July.

At the same time, the us president, Donald Trump has stated via Twitter that he has failed to launch missiles on Iran in response to the slaughter of a surveillance drone, highlighting the uncertainties about a war in the region.

The tensions between the two countries are fragile, since the White House has decided to pull out of the nuclear deal in 2015, with Iran, supported by the UN. The administration recently accused Iran of attacks on tankers in the Persian gulf, that denies Tehran.

The us dollar appreciated against the japanese yen, with USD/JPY rising from 0.4% to 107,66.

The euro was up against the dollar, with EUR/USD up 0.3% to 1,1332, while GBP/USD fell 0.2% to 1,2674 and USD/CAD rose 0.2% to 1,3213.

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