U.S. Dollar Slips After Weak PMI Data; Middle East Tensions

Investing.com - The U.S. dollar remained near three-month lows on Friday as rising tensions between Iran and the U.S. and weaker-than-expected PMI data kept the dollar down.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 96.047 by 10:54 AM ET (14:54 GMT).

Weakening manufacturing data on Friday increased support for the Federal Reserve cutting rates in July, with the preliminary purchasing managers index from Markit slipping towards the 50 contraction threshold.

The central bank signaled on Wednesday that they would be willing to cut rates in order to combat slowing global growth and cooling inflation, with investors pricing in a July rate cut at 100%.

Meanwhile, U.S. President Donald Trump said via Twitter that he had come within minutes of firing missiles at Iran in response to it shooting down a surveillance drone, increasing uncertainty over war in the region.

Tensions between the two countries have been fragile since the White House decided to withdraw from the UN-backed 2015 Iran nuclear agreement. The administration most recently accused Iran of last week's attacks on oil tankers in the Persian Gulf, which Tehran denies.

The dollar rose against the safe haven Japanese yen, with USD/JPY up 0.4% to 107.66.

Elsewhere, the euro was stronger on the weak dollar, with EUR/USD up 0.3% to 1.1328, while GBP/USD slipped 0.2% to 1.2674 and USD/CAD rose 0.2% to 1.3213.

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