Dollar Plunges against Peers on Yellen’s Comments, PMI Data

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Dollar Plunges against Peers on Yellen’s Comments, PMI DataThe dollar plunged the most against major currencies after the Federal Reserve Chair Janet Yellen announced that the economy will still need further supportive measures after a manufacturing gauge plunged.

The yen, normally considered a safe-haven currency, plunged 0.3 percent to 103.18 per dollar, its lowest point in three weeks as news filtered in that Russian and U.S. are seeking diplomatic solution over Ukraine tension. The yen also fell 0.7 percent against the 18-nation euro to 142.36.

“The yen is gradually re-weakening, reflecting easing investor concerns in the near term over both slowing economic growth in the U.S. and China, and over escalating geopolitical tensions in Ukraine,” Lee Hardman, a London based foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd told Bloomberg.

The Turkish lira led advances by emerging-nation currencies after Prime Minister Recep Edorgan’s party emerged victorious in the local polls. The currency surged to a 2 percent to 2.1468 against the dollar, its highest since January 2, before settling at 2.1533.

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The ruble rose 1.1 percent to 41.3649 against a basket of currencies after U.S. Secretary of State announced diplomatic solutions were being considered with Russia over Ukraine. The dollar plunged 0.3 percent against the euro in mid-morning trade in New York after earlier touching a one-month high of $1.3705 on Friday.

The Bloomberg Dollar Spot Index plunged 0.1 percent to 1,014.95. The dollar fell on data by the Institute for Supply Management-Chicago Inc. that indicated its business gauge declined from 59.8 in February to 55.9 this Month.

 “What we saw was the weaker data coming from the Chicago purchasing managers’ index, and comments from Yellen were taken as somewhat dovish,” said Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York. “The dollar is a little weaker here, but there’s a bias to buy dollar-yen right now ahead of payrolls on Friday.”

To contact the reporter of this story; Jonathan Millet at john@forexminute.com