Greenback extends slide by Korman Tam

The greenback extended its overnight slide into the New York session as US markets returned from the long weekend. Improving global risk appetite pushed the Dow Jones, Nasdaq and S&P 500 higher by over 1% and crude oil up to just beneath the $77-per barrel level. The hawkish RBA minutes set the tone for the markets – revealing its upbeat expectations for economic growth and increased likelihood for additional rate hikes in the coming months.

The US economic reports released earlier were better than expected with the NY Fed manufacturing survey and NAHB housing market index sharply beating estimates. The February NY Fed manufacturing survey spiked to 24.91, outpacing calls for an improvement to 18.00 from 15.92 in January. The better than forecast manufacturing index marked its strongest pace in 4-months. Meanwhile, the NAHB housing market index also beat expectations, printing at 17 in February, improving from 15 in January.

Foreign demand for US assets slowed in December with net long-term inflows totaling $63.3 billion and down from a downwardly revised $126.4 billion in November. China’s appetite for US Treasuries fell sharply with the data revealing that China was a net seller – reducing holdings by $34.2 billion to $755 billion in December, its steepest monthly decline in almost 10-years.