July 3 (Bloomberg) -- The dollar declined against most of its major peers on speculation Federal Reserve may introduce another round of bond purchases, known as quantitative easing, to stimulate faltering growth.
The greenback slid against the euro before U.S. data today forecast to show factory orders stagnated after the Institute for Supply Management’s gauge of manufacturing unexpectedly fell yesterday. Demand for the yen was hampered as Asian stocks rose for a fifth day, sapping demand for haven assets. Australia’s dollar traded within 0.1 percent of a two-month high after data showed building approvals surged by a record in May.
“The U.S. economy has been losing steam to date,” said Mike Jones, a Wellington-based currency strategist at Bank of New Zealand Ltd. “Signs of more aggressive slowdown are negative for the U.S dollar insofar as they elicit another round of quantitative easing from the Fed.”
The dollar slid 0.1 percent to $1.2582 per euro as of 10:35 a.m. in Tokyo yesterday when it advanced 0.7 percent. The greenback was at 79.59 yen from 79.51 yesterday. The Japanese currency fetched 100.14 per euro from 100 yesterday, when it jumped 1 percent. The Australian dollar gained 0.2 percent $1.0268 from yesterday, when it touched $1.0278, the highest since May 4.
The MSCI Asia Pacific Index of stocks advanced 0.6 percent, extending last week’s 2.7 percent gain.
U.S. factory orders probably rose 0.1 percent in May after a 0.6 percent drop the previous month, according to the median estimate of economists surveyed by Bloomberg News before the Commerce Department releases its data today.
The ISM’s index fell to 49.7, worse than the most-pessimistic forecast in a Bloomberg poll, from 53.5 in May, the Tempe, Arizona-based group’s report showed yesterday. Figures less than 50 signal contraction. Measures of orders, production and export demand dropped to three-year lows.
“This is not an economy in galloping growth that’s creating 300,000 or 400,000 net new jobs a month,” Kenneth Rogoff, an economics professor at Harvard University, said in an interview with Bloomberg Television. “Right now the U.S., although not falling into an immediate recession, is not an engine of growth that’s going to pull us out with China slowing and Europe in recession.”
The number of permits granted to build or renovate houses and apartments in Australia jumped a record 27.3 percent from April, when they declined a revised 7.6 percent, the Bureau of Statistics said in Sydney. The median estimate of economists in a Bloomberg survey was a 5 percent gain.
The Reserve Bank of Australia will keep its cash-rate target at 3.5 percent at a policy meeting today, according to all 28 economists in a Bloomberg poll.
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