US dollar near flat despite solid data

The U.S. dollar index was little changed on Thursday in Asia despite the release of strong economic data.

The U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 97.302 by 1:14 AM ET.

ISM nonmanufacturing data for February showed an uptick to 57.3, beating expectations of 54.9. This represents the highest reading for the service sector index since February 2019.

Ahead of the key nonfarm payrolls report, meanwhile, the private labor market generated a better-than-expected 183,000 jobs in February.

The GBP/USD pair inched up 0.1% to 1.2874. Uncertainty about trade talks between Britain and the European Union remained in focus, while expectations for UK interest rate cuts grew.

The AUD/USD pair was little changed on 0.6627. Australia’s Treasury Department said on Thursday that it is not forecasting a recession as yet, but that the coronavirus is expected to wipe half a percentage point from first-quarter growth.

The USD/JPY pair lost 0.2% to 107.35 after the International Monetary Fund Managing Director Kristalina Georgieva said the global economic outlook has shifted to “more dire scenarios” as the coronavirus has spread undetected.

“In terms of our projections, we unfortunately over the last week have seen a shift to a more adverse scenario for the global economy,” Georgieva told reporters at a briefing Wednesday in Washington.

“It is, unfortunately, spreading undetected more than initially was thought,” Georgieva said. “The moment it became clear it is no more just about China and maybe a small number of countries in Asia surrounding China, then the outlook on what the impact could be changed.”

The IMF announced a $50 billion aid package to help fight the coronavirus.The money is available “immediately” and is for low-income and emerging market countries, according to Georgieva./Investing.com

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