The dollar fell across the board on Monday, sliding to a nearly four-week low against the yen, as softer-than-expected US manufacturing data for March interrupted a run of generally upbeat economic reports. The yen, meanwhile, firmed on safe-haven flows following unexpectedly weak Chinese factory activity and renewed uncertainty in the Korean peninsula.
Volume, however, was thin, with many markets still closed for Easter holidays, and the low liquidity led to exaggerated currency moves. A weaker-than-forecast US manufacturing report kicked off selling in the dollar. The Institute for Supply Management said its index of national factory activity fell to 51.3 from 54.2 the month before. The reading was shy of expectations of 54.2 according to a Reuters poll of economists.
"There are some clear signs that recent growth momentum in the manufacturing sector will not be easily built," said Alan Ruskin, head of G10 FX strategy at Deutsche Bank in New York. The greenback has been in a broad rally this year as evidence mounted that the US economy is on a stable path to recovery. The dollar index has gained 3.6 percent so far in 2013.
In midday trading, the dollar index, which measures the greenback's value against six major currencies, was down 1.6 percent to 82.690. It fell as low as 82.647, a one-week trough. The dollar fell nearly 1.0 percent to 93.28 yen, falling as low as 93.16, the lowest since March 6. The euro also slid 0.7 percent to 119.98 yen. The euro, meanwhile, was up 0.3 percent against the dollar at $1.2861, rallying from a low of $1.2770.
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