2023.03.0120:56:00UTC+00Dollar Drifts Lower Against Major Counterparts

The U.S. dollar drifted lower against most of its major counterparts on Wednesday, weighed down by upbeat Chinese factory data.

Bank of England Governor Andrew Bailey said in his speech at Brunswick Group's Cost of Living Conference in London that further increase in the interest rate might be required to achieve the UK inflation target on a sustainable basis.

ECB's Joachim Nagel said today that the central bank might need significant rate hikes beyond March to combat high inflation.

China's official manufacturing Purchasing Managers' Index rose to 52.6 from 50.1 in January, smashing expectations after the country abruptly lifted COVID-19 curbs.

China's non-manufacturing activity also grew at a faster pace in February and the private sector index from Caixin/S&P showed factory activity rising for the first time in seven months, helping ease investor fears over rising interest rates.

A report from the Institute for Supply Management showed the manufacturing PMI inched up to 47.7 in February from 47.4 in January, a reading below 50 still indicates a contraction. Economists had expected the index to edge up to 48.0.

The report also showed the prices index jumped to 51.3 in February from 44.5 in January, indicating raw materials prices increased after decreasing for four consecutive months.

The dollar index dropped to a low of 104.09 earlier in the day, was at 104.39 a little while ago, down nearly 0.5% from the previous close.

Against the Euro, the dollar weakened to 1.0670 from 1.0578.

The dollar is down slightly against Pound Sterling at 1.2028. Against the Japanese currency, the dollar is little changed at 136.21 yen.

Against the Aussie, the dollar is trading at 0.6760, down nearly 0.5% from the previous close.