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U.S. Dollar Struggles as Dallas Manufacturing Data Disappoints

Investing.com - The U.S. dollar was near three-month lows on Monday after disappointing regional data and rising tensions between Iran and the U.S.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 95.59 by 10:45 AM ET (14:45 GMT).

The Dallas Fed manufacturing activity index for June came in weaker than expected at -12.1 compared to estimates for -1.0.

The data confirm declining activity across other regions in the U.S., as the Philly Fed activity index and Empire manufacturing index were also weaker. The numbers boost the case for the Federal Reserve to cut rates this year, as economic activity across the U.S. slows.

Meanwhile, U.S. Secretary of State Mike Pompeo warned that “significant” sanctions against Iran would be announced on Monday and added that he wants to build a “global coalition” to deal with the threat he says is posed by Iran.

President Donald Trump ordered, but subsequently called off, a military strike last week in response to Iran shooting down an unmanned U.S. drone.

Tensions between the two countries have been fragile since the White House decided to withdraw from the UN-backed 2015 Iran nuclear agreement.

The dollar rose against the safe-haven Japanese yen, with USD/JPY up 0.1% to 107.40.

Elsewhere, the euro was stronger on the weak dollar, with EUR/USD up 0.3% to 1.1394, while GBP/USD slipped 0.2% to 1.2721 and USD/CAD fell 0.1% to 1.3202.

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