Dollar hits 1-week low ahead of US manufacturing data

The US dollar fell on Thursday, deepening its losses for the fourth straight day, and hit a 1-week low, as demand slowed due to improved risk appetite, as hopes were renewed for a new fiscal stimulus in the US to counter the coronavirus impact, ahead of key data releases on the US manufacturing sector.

The dollar index fell 0.3% to a 1-week low of 93.53 points, after opening at 93.80, and hit an intraday high of 93.92.

The greenback lost 0.1% yesterday, its third daily loss, after the release of strong economic data in the US.

The dollar index has gained 1.8% during September, posting its first monthly gain in 5, thanks to strong demand for the US currency, and fears about the global economy after a spike in Covid-19 infections in Europe and the US.

President Donald Trump's administration has proposed a $1.5 trillion stimulus package in the House of Representatives, which comes within the ongoing talks between the two parties to find a compromise on the new Covid-19 relief package.

These developments renewed hopes were for a new fiscal stimulus in the coronavirus-battered economy that is currently suffering its worst economic crisis since the 1930s Great Depression.

Investors are anticipating key economic data releases today on the US manufacturing PMI for September, which delivers insight on the the US economic recovery path during the third quarter.

At 12:30 GMT, the US jobless claims reading is expected to reach 0.850 million in the week ending September 26, from 0.870 million in the previous week.

Investors are also waiting for the release of the US personal spending July's reading, with forecast to rise by 0.7% vs. a rise by 1.9% in July, and the personal income index is expected to drop 2% from a rise by 0.4% in July.

At 14:00 GMT, the ISM manufacturing PMI reading for September will be released, with forecasts to reach to 56.0 points in September, unchanged from August's reading.