Dollar Drops on Declining U.S. Durable Goods Orders

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Dollar Drops on Declining U.S. Durable Goods OrdersThe dollar fell after U.S. durable goods orders unexpectedly nosedived in September ahead of the scheduled two-day meeting by the Federal Open Market Committee.

The dollar plunged 0.4 percent to trade at $1.2743 per euro, its third consecutive drop. It advanced 0.2 percent to steady at 108.03 yen. The yen dropped 0.6 percent to 137.66 per euro. The greenback fell after orders of goods lasting at least three years fell 1.3 percent after plunging 18.3 percent a month earlier, reported the Commerce Department on Tuesday.

The FOMC is scheduled to phase out the stimulus program this month, something it confirmed in its September gathering. The Fed officials have retained the benchmark interest rate at zero to 0.25 percent all the way since Dec. 2008.

“There’s a question mark going into the FOMC tomorrow — we have to see what hints the board gives on the outlook,” Charles St-Arnaud, a senior economist at Nomura Securities International Inc in London, told Bloomberg News.

Meanwhile, the Swedish krona touched a four-year low after a decision by the central bank to reduce the target borrowing rate to zero cause investors to dump the currency. The krona fell 0.4 percent to trade at 7.3255 per dollar after earlier falling to 7.3829, its lowest level since Sept. 2010. It depreciated 0.8 percent to 9.3371 per euro, having earlier dropped 1.3 percent, the most since July 3.

The Australia’s dollar extended its gains the third day, rising 0.7 percent to steady at 88.60 U.S. cents, mainly due to investors rushing in to benefit from the nation’s interest rates that are among the highest in developed economies. Australia’s target interest rate is 2.5 percent, with other developed economies recording an average rate of zero to near zero. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com