Investing.com - The Australian dollar fell further on Wednesday in Asia after February building approvals data came in much weaker than expected following a sharp gain in January, likely disappointing the Reserve Bank of Australia that sees the sector as crucial to rebalance the economy as a mining investment boom wanes.
AUD/USD traded at 0.9230, down 0.19%, after the data which shhowed a month-on-month drop of 5.0%, compared to an expected decline of 2.5% from the previous month gain of 6.8%.
Separately, USD/JPY traded at 103.85, up 0.18%, after the Bank of Japan released a new set of data on the inflation outlook measured in CPI among companies polled in its quarterly Tankan survey for March.
Almost a third of the companies polled and the highest percentage expect inflation, excluding the effects of tax hikes that started April 1, to rise only about 1% in 12 months from now, by which time the central bank wishes to see the year-on-year increase in core CPI rise to 2%.
Overnight, the dollar traded mixed to lower against most major currencies, trimming losses as markets digested a softer-than-expected factory report and determined the data depicted a U.S. economy that remains on the road to recovery.
The Institute for Supply Management reported earlier that its manufacturing purchasing managers'' index rose to 53.7 in March from 53.2 in February, missing market expectations for a 54.0 reading.
The report showed that employment growth slowed, with the employment index falling to 51.1 from 52.3, the lowest level since June 2013.
The numbers weakened the dollar earlier, as investors avoided the greenback ahead of Friday''s March jobs report, which many feel may depict and improving albeit sluggish U.S. economy, one still in need of Federal Reserve stimulus support.
The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses interest rates to prop up the economy, weakening the dollar as a side effect.
Upon digesting the data, however, investors viewed the PMI numbers as positive overall, as March marked the second month of gains for the indicator, which kept expectations firm that stimulus programs that have weakened the dollar for years are on their way out.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 80.24.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.
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