The U.S. dollar weakened against the other major currencies in the Asian session on Wednesday, as weak U.S. business productivity data in the second quarter raised speculation that the Federal Reserve would be slow to raise interest rates.
The Labor Department released a report on Tuesday showing an unexpected decline in U.S. labor productivity. The report showed that productivity fell by 0.5 percent in the second quarter after sliding by 0.6 percent in the first quarter. The decrease came as a surprise to economists, who had expected productivity to climb by 0.5 percent.
Meanwhile, the Labor Department said unit labor costs surged up by 2.0 percent in the second quarter after edging down by a revised 0.2 percent in the first quarter. Economists had expected labor costs to climb by 1.8 percent compared to the 4.5 percent jump that had been reported for the previous quarter.
Tuesday, the U.S. dollar showed mixed trading against its major rivals. While the U.S. dollar rose against the pound and the Swiss franc, it fell against the euro and the yen.
In the Asian trading, the U.S. dollar fell to 5-day lows of 1.1156 against the euro and 101.16 against the yen, from yesterday’s closing quotes of 1.1116 and 101.87, respectively. If the greenback extends its downtrend, it is likely to find support around 1.13 against the euro and 98.00 against the yen.
Against the pound and the Swiss franc, the greenback dropped to 2-day lows of 1.3090 and 0.9793 from yesterday’s closing quotes of 1.3001 and 0.9810, respectively. The greenback is likely to find support around 1.35 against the pound and 0.96 against the franc.
Against the Australian, the New Zealand and the Canadian dollars, the greenback slipped to more than a 3-month low of 0.7707, 1-week low of 0.7223 and a 5-day low of 1.3051, from yesterday’s closing quotes of 0.7671, 0.7163 and 1.3119, respectively. The greenback may test support near 0.78 against the aussie, 0.73 against the kiwi and 1.27 against the loonie.
Looking ahead, U.S. crude oil inventories data is due to be released in the New York session.
At 2:00 pm ET, U.S. Federal monthly budget statement for July is slated for release.