Dollar ends mixed after short-covering in New York

Although the greenback fell broadly in Asia and European morning on usd's broad-based weakness as coronavirus relief package negotiations between the Democrats and Republicans remained at standstill as well as concerns that the Federal Reserve will keep interest rates low for prolonged period of time due to shift in inflation policy. Dollar later rebounded in New York on short-covering together with upbeat U.S. data and ended Tuesday mixed.  
  
Reuters reported the Institute for Supply Management (ISM) said on Tuesday its index of national factory activity increased to a reading of 56.0 last month from 54.2 in July. That was the highest level since January 2019 and marked three straight months of growth. Economists polled by Reuters had forecast the index would rise to 54.5 in August.     They also reported the Federal Reserve will need to roll out new efforts "in coming months" to help the economy overcome the impact of the coronavirus pandemic and live up to the U.S. central bank's new promise of stronger job growth and higher inflation, Fed Governor Lael Brainard said on Tuesday.     
Brainard, among the architects of the new long-term strategy the central bank adopted last week, is the first Fed official to tie that new approach directly to the need for further monetary stimulus, likely in the form of more aggressive bond-buying or more ambitious promises about returning the country to low unemployment.   
  
Versus the Japanese yen, although dollar rebounded to 106.03 shortly after Asian open, price met renewed selling and fell to session lows at 105.60 on usd's broad-based weakness. However, the pair erased intra-day losses and later rallied to 106.15 in New York morning on cross-selling in jpy before retreating to 105.91 on profit-taking.  
  
The single currency extended its recent ascent and rose to 1.1997 in Asia on usd's broad-based weakness before retreating to 1.1962 in European morning on profit-taking. Despite subsequent rally in tandem with cable to+a fresh 27-month high at 1.2011 in New York morning, the pair fell to 1.1902 on usd's broad-based recovery.  
  
Although the British pound retreated to 1.3357 at Asian open, renewed buying interest emerged and cable rallied to 1.3419 and then ratcheted higher to a fresh 8-1/2 month high at 1.3482 in Europe on broad-based selling in the greenback. However, price then fell to 1.3370 in New York on recovery in usd before moving sideways.  
  
In other news, Reuters reported Senate Republicans are likely to take up their COVID-19 relief bill next week offering $500 billion in additional federal aid, White House chief of staff Mark Meadows said on Tuesday, adding that the administration was still weighing help for U.S. airlines.     And an interview on CNBC, Meadows said he expected Senate Republicans' legislation would be "more targeted" than House Democrats' offer and could either be used as a building block or be passed on its own while negotiations continue.  
  
Data to be released on Wednesday :  
  
New Zealand terms of trade, import prices, export prices, UK BRC shop price index, nationwide house price index, Australia GDP, Germany retail sales, EU producer prices, Canada labour productivity rate, and U.S. MBA mortgage applications, ADP employment change, ISM New York index, durables ex-defense, durable goods, durables ex-transportation, factory orders.