The dollar set new record lows versus the yen and Swiss franc on Monday, as ongoing debt concerns led to increased appetite for safe haven assets.
The dollar finally extended an all-time low from back in March against the yen, falling through support despite signs that Congress will approve a measure raising the nation’s debt ceiling.
The bill will do little to alleviate fears that the U.S. economy has entered a prolonged rough patch.
While the Institute for Supply Management released a report on Monday showing that activity in the U.S. manufacturing sector expanded for the 24th consecutive month in July, the pace of expansion slowed by much more than anticipated.
The ISM said its index of activity in the manufacturing sector fell to a reading of 50.9 in July from a reading of 55.3 in June, although a reading above 50 indicates growth in the sector.
This after Friday’s dismal reading on second quarter GDP, which showed that the economy grew at an annual rate of only 1.3 percent.
The dollar dropped to Y76.28 against the yen, prompting speculation that Japanese authorities will intervene to weaken the yen.
The buck also fell sharply versus the Swiss Franc, to a fresh record low of CHF 0.7728.
Versus the euro, the buck jumped to $1.4180, with traders even more leary of the fiscal environment in the euro zone.
Germany’s manufacturing industry expanded at a slower pace in July, final data from a survey conducted by Markit Economics and the German Association for Materials Management showed Monday.
The seasonally adjusted Markit/BME purchasing managers’ index dropped to 52 in July from 54.6 in June. The latest reading was lower than the flash estimate of 52.1, and was the lowest since October 2009.
In the U.S., the ISM said its index of activity in the manufacturing sector fell to a reading of 50.9 in July from a reading of 55.3 in June, although a reading above 50 indicates growth in the sector.