(Reuters) The dollar dropped to two-week lows on Monday after data showed the U.S. manufacturing sector shrank for a fourth straight month in November and construction spending fell unexpectedly, stoking fears the world’s largest economy could slip into recession.
Before the U.S. data’s release, the dollar had already weakened earlier, after U.S. President Donald Trump on Monday announced he would restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina in apparent retaliation for currency weakness he said was hurting U.S. farmers.
“It’s a combination of both trade concerns and weak U.S. data,” said John Doyle, vice president of dealing and trading, at Tempus Inc in Washington, explaining Monday’s dollar move.
“The dollar was already weakening before the data, but the weakness accelerated when the manufacturing numbers came out. It didn’t help that manufacturing reports out of Europe were beating expectations and ours were awful,” he added.