LONDON: The U.S. dollar traded near a recent three-month low on Monday on weak manufacturing surveys, while the Australian dollar lifted after the central bank cut interest rates as expected but signaled a more balanced outlook.
JPMorgan's gauge of global manufacturing fell to its weakest in almost seven years, showing a contraction in the sector for the second month in a row, while Morgan Stanley's own surveys showed world manufacturing shrinking for the first time since 2016.
Against a basket of its rivals, the dollar was 0.1% lower at 96.75 and not far from a three-month low of 95.84 hit last week with traders firmly of the view the Fed will cut interest rates at least three times by the end of the year.
However, the dollar's losses were relatively tiny in comparison with Monday's 0.6% bounce when global risky assets rallied on relief of waning trade tensions between Washington and China.
"Bigger hurdles lie ahead this week, notably ADP tomorrow and NFP on Friday," said Kenneth Broux, a currency strategist at Societe Generale in London referring to the jobs data later this week.
The global investor spotlight will move to U.S. non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with a 75,000 increase in May.
The Australian dollar was the sole spot of strength in the global currency markets as it bounced 0.3% after a central bank rate cut decision offered few clues about future easing.
The central bank lowered interest rates by 25 basis points to a record low of 1.00%, matching economists' expectations. In a statement it said it would lower rates again "if needed", a phrase some analysts took to mean an additional rate cut was less likely than they had previously thought.
Traders attributed the currency's bounce to heavy short positions built up in the Aussie ahead of the decision. Latest positioning data showed short bets at a six-month high.
Elsewhere, the pound was broadly steady around $1.26 after Jeremy Hunt, a contender to replace British Prime Minister Theresa May, said German Chancellor Angela Merkel was willing to look at proposals for a revised Brexit deal.
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