Dollar dips vs euro, eases vs. yen as risk appetite fades
By Sam Forgione
NEW YORK (Reuters) - The U.S. dollar eased off a six-week high against the yen and fell against the euro after weak U.S. April auto sales added to worries that the Federal Reserve may eventually take a more dovish-than-expected view on interest rate increases over the remainder of the year.
No. 1 U.S. automaker GM GM.N reported a 6 percent decline in April sales. Sales at Ford F.N, the No. 2 U.S. automaker, fell 7.2 percent in April, while Toyota 7203.TTM.N recorded a drop of 4.4 percent.
The declines in U.S. new vehicle sales followed data on Monday showing weak U.S. factory activity and inflation and last week's release of U.S. first-quarter gross domestic product growth, which showed the weakest performance in three years.
"The bigger risk of this autos data is that it reflects a broader slowdown in consumption," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York.
"It kind of gives a little bit of support to the guys who are saying it’s one more and done," Wizman said in reference to the possibility of just one more Fed rate hike this year.
The dollar had gained as much as 0.4 percent against the yen to 112.30 yen, its highest since March 21, as risk appetite fueled losses in the safe-haven Japanese currency. The dollar was last just 0.1 percent higher against the yen at 111.97 yen as risk appetite faded.
The euro was last up 0.3 percent against the dollar at $1.0925 after trading negative against the dollar earlier in the session.
Traders were awaiting a policy statement from the Fed at the end of its two-day meeting on Wednesday and Friday's U.S. April non-farm payrolls report from the U.S. Labor Department. Economists polled by Reuters expect U.S. employers to have added 185,000 jobs last month, up from March's 98,000. Continued...