Dollar slumps amid fresh fears over U.S. economic recovery

NEW YORK (Forex News Now) – The U.S. dollar slumped broadly on Thursday, as FX traders feared the U.S. economic recovery was at risk in the wake of disappointing data on the U.S. manufacturing sector.

In late U.S. currency trading, the dollar tumbled against the euro and pound, with EUR/USD trading at 1.2904, up a huge 1.27 percent on the day, and GBP/USD trading at 1.5429, up 1.05 percent.

The greenback’s losses came after official reports showed that manufacturing activity in the Philadelphia region and New York State cooled significantly in July.

The reports overshadowed upbeat U.S. jobs data, which showed that new claims for unemployment benefits fell more than forecast last week.

Meanwhile, the greenback was down versus the yen, with USD/JPY trading at 87.49, down 1.02 percent, ahead of a key report on Japan’s services sector.

The U.S. dollar also slid against the kiwi and Swiss franc, with NZD/USD traded at 0.728, up 0.5 percent, and USD/CHF trading at 1.0425, down 0.97 percent.

But the greenback rose against the Aussie and loonie: AUD/USD traded at 0.8842, down 0.08 percent, and USD/CAD traded at 1.037, up 0.4 percent.

The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, was down 1.06 percent.