US Dollar at 23-Month Low

The Trump administration, already reeling from allegations of Russian meddling in the US presidential election, received a fresh blow on Friday after White House spokesman Sean Spicer resigned, perpetuating the notion of disarray. The prolonged weakness in the US dollar has seen the Euro climb as much as 0.20% higher to $1.1681 after rallying to a 23-month high of $1.1683 on Friday.

The single currency has been riding on a bullish wave following comments from ECB President Mario Draghi last week pertaining to asset purchases viewed as hawkish by investors. All eyes will now be focused on the US Federal Reserve as the Open Market Committee begins a two-day meeting on Tuesday. Analysts will be looking for clues as to whether the Central Bank plans to commence its balance sheet unwind.

The pace of expansion in Japan's manufacturing sector decelerated for the second consecutive month in July amid a stagnation in export demand per figures compiled by a leading private survey. On a seasonally adjusted basis, the Markit/Nikkei Japan Flash Manufacturing PMI, which measures changes in activity levels across the country’s manufacturing sector, dropped to 52.2 in July from a final 52.4 in June.

The current month’s figure marked an 8-month low, but remained firmly above 50.0, which separates contraction from expansion. The flash index for new export orders, often considered a leading indicator of the outlook for activity, slipped to 50.00 from a final 53.40 in June, while the output component slid to 51.4 from 52.2 in June. USDJPY is still trading in a strong downtrend since hitting a high of 114.500 earlier in July, reaching a one-month lower earlier before rebounding back above 111.000.