The dollar fell the most in three weeks as a report showing U.S. manufacturing slowed added to speculation whether the economy is strong enough for the Federal Reserve to accelerate reductions in its asset-purchase program.
The U.S. currency fell versus most major peers after its biggest monthly gain in January since May as a global selloff of emerging-market currencies prompted investors to seek haven assets. The euro strengthened against the dollar before the European Central Bank meets this week amid speculation slowing inflation may prompt officials to consider additional stimulus. The Polish zloty rose while a broader measure of emerging-market currencies extended last week’s losses.
“The ISM number is the main driver in the market,” Dan Dorrow, the head of research at Faros Trading LLC in Stamford, Connecticut, said in a phone interview. “It’s not a good number for risk currencies. That’s why we’re seeing the move for dollar-yen.”
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