NEW YORK/LONDON, May 15 (Reuters) – The dollar was down from a five-week high on Monday, weighed on by weak New York state manufacturing index data and as it consolidated gains made last week on fears the debt ceiling and the US economy.
* In emerging markets, the Turkish lira sank to near a record low as the weekend’s election looked headed for a runoff.
* The greenback slumped on news that the New York Federal Reserve’s Empire State Manufacturing Index plunged to -31.8 this month from a reading of 10.8 in April.
* The dollar’s slide came after Friday posted its best weekly performance since September 2022.
* “I think we are consolidating today after a big move in the dollar last week,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “Things that have weighed on the dollar recently have not gone away, like the debt ceiling, although there has been some progress.”
* President Joe Biden is scheduled to meet with congressional leaders on Tuesday for face-to-face talks, a day before he leaves for a G7 meeting in Japan.
* Although the two sides do not appear close to an agreement, the White House has not ruled out annual spending limits that Republicans say must accompany any increase in the nation’s $31.4 trillion debt limit.
* The dollar =USD index, which compares the greenback to a basket of six currencies, was down 0.2% at 102.48, less than a five-week high of 102.75 hit earlier in the session.
* Analysts point out that the recent strength of the dollar may be due to several factors, including concerns about inflation in the United States and fears that the stagnation of the debt ceiling and global economic growth will prompt the purchase of safe haven assets.
* Alvin Tan of RBC Capital Markets said the rally in US bond yields over the past two days had supported the currency.
* The euro EUR=EBS was up 0.2% against the dollar at $1.0875, recovering after falling 1.54% the previous week.
* The dollar was up 0.3% against the yen JPY=EBS at 136.14, after improving 0.67% last week. Sterling GBP=D3 was up 0.5% at $1.2513, recovering after declining 1.45% last week.
* For its part, the Turkish lira was trading at near-record lows as the weekend’s elections looked headed for a second round, while the Thai baht rallied after the electoral setback suffered by pro-military forces in the country.
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