The U.S. dollar extend losses agains safe-haven currencies The U.S. dollar came under strong selling pressure as poor macroeconomic data coupled with rising tensions between the U.S. and China took the gloss off the greenback in investors' eyes.
The U.S. Dollar Index (DXY) collapsed below 98.00 amid growing concerns over the health of the American economy and the side effects of the US-Sino trade war on the global economy. The steady sell-off on the equity markets added weight to the bearish sentiments and send the greenback lower across the board.
The new-home sales turned out worse than expected and registered the most significant month-on-month decline in 2019. The purchases of new single-family homes decreased by 6.9% in April, against the forecasted drop of 2.7%. It means that the housing market is losing momentum despite that a spring is traditionally considered a strong selling season.
The poor data renewed the fears that the U.S. economy might slip into a technical recession and reminded investors that the Federal Reserve might bring the key interest rates down to counter the economic weakness. Additionally, the US-China trade deal seems more like a distant dream than an achievable goal at this stage.
The above-said factors contributed to the dollar's falling, especially against safe-haven currencies like Japanese Yen and Swiss Franc. However, the sell-off may be limited in the long-run as the worries about the state of the global economy and local weakness of the overseas markets are likely to overshadow the dollar-negative factors.
