Sept. 1 (Bloomberg) -- The dollar traded near a five-week low against the yen on expectations an industry report will show U.S. manufacturing fell to a 10-month low in August.
The Institute for Supply Management's index of manufacturing probably fell to 60 from 62 in July, based on the median estimate of 73 economists surveyed by Bloomberg News. The dollar had its biggest drop in two weeks yesterday after consumer confidence and Chicago-area manufacturing fell more than forecast, suggesting the economy may extend a second-quarter slump.
``We've seen falls in all the recent data, which would suggest the ISM potentially will be below 60,'' said Robert Rennie, a currency strategist in Sydney at Westpac Banking Corp. ``That's going to lead to more dollar selling.''
Against the yen, the dollar traded at 109.03 at 9:30 a.m. in Tokyo, according to electronic foreign exchange dealing system EBS, from 109.17 late in New York yesterday, when it fell as low as 108.74, the weakest since July 21. The dollar was also at $1.2189 per euro, from $1.2183.
The National Association of Purchasing Management-Chicago yesterday said its regional index dropped to 57.3 in August from 64.7 in July, below the median forecast of 60. Readings greater than 50 signal growth.
A separate report showed a drop in the Conference Board's gauge of consumer sentiment in August fell to 98.2 from a two- year high of 105.7 in July, less than the median forecast of 102.8.
`Precipice'
The dollar may also decline on concern a report Friday will show the pace of U.S. job creation will fall short of economists' estimates for a third month. U.S. employers probably added 150,000 jobs in August, according to the median estimate in a Bloomberg News survey.
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