The US dollar slumped as triggered by several factors such as the weakening release of US economic data, strengthening oil commodity prices, and fading fears of a global slowdown. This spurred investors to reduce their ownership of the Greenback, and increase interest in high-risk assets such as the Commodity Dollar.

The most significant weakening of the US dollar was seen in the USD / CAD currency pair which fell 0.52 percent in the early trading session, incising the biggest decline throughout April 2019. In addition, the strengthening of the Canadian Dollar was also supported by a bullish rally in oil prices which broke new record highs, after Brent Oil touched the level of $ 71 per barrel.

Not only against commodity currencies, the US Dollar also recorded a significant weakening versus the Euro, as investors closed EUR / USD short positions ahead of the ECB monetary policy announcement on April 10 tomorrow. Overall, the US Dollar weakened with the movement of the DXY Index which sank 0.34 percent, marking the biggest daily decline since March 20.

Increase In Impact-Less US Bond Yield

The US dollar was unaffected by the effects of the 10-year US bond yields which soared to 2,518 percent last night, away from a 15-month low touched in late March. Shin Kadota, Senior Strategist at Barclays in Tokyo said that US Bond Yields have not helped much in encouraging a stronger greenback, as markets see bond yields historically still at a low level.
Kadota also added that the peak of the strengthening of the US dollar was seen at the release of the NFP in March last week, which was accompanied by a slowdown in the increase in workers' wages. Since then, the appeal of the US Dollar has faded to date.

US Dollar Slips Post Data Factory Orders

Demand for US manufactured goods fell but still according to expectations. The weaker US dollar was more caused by reduced safe haven demand. The US dollar weakened in the trading session on Tuesday (09 / April), after US Factory Orders data were reported to fall as expected. However, overall the economic data of the United States in the past week is still fairly good, thus easing the actions of safe haven purchases on global concerns.

New demand for Factory Orders, fell to -0.5 percent in February 2019, in line with expectations. This happened while in the previous month, the US manufacturer's orders showed zero growth. The transportation equipment sub sector contributed greatly to the reduction in US Factory Orders with a decrease of -4.5 percent. Following the sub-sector were declines in the machinery, computers and electronic goods sectors.

Concerns about Global Growth Eased

However, the Factory Orders data are only data that have a medium-low impact on the US Dollar. Broadly speaking, the market considers that US economic data is still quite safe from global slowdown signals. As a result, demand for the US Dollar as a safe haven also declined. Even so, today's DXY level is still in the range formed since March 28, after a sharp decline on March 20 which reached a low level of 95.9. According to Paresh Upadhyaya, analyst at Amundi Pioneer Investment Management in Boston, today's forex market movements show that expectations for a slowdown in global growth have declined. What's more, last week's US and Chinese economic data confirmed this.

Upadhyaya views this as the cause of the weakening US Dollar, while Antipodean currencies such as the Australian Dollar and New Zealand Dollar strengthen. When this news was written, AUD / USD traded at the level of 0.7124, up slightly 0.28 percent from the previous level. However, the movement of the Australian Dollar has been ranging since March 11.