Dollar Halts Further Gains on Conflicting U.S. Economic Data

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Dollar Halts Further Gains on Conflicting U.S. Economic DataThe dollar fell against most of its peers after various reports indicated that U.S. economic recovery remains uneven. U.S. durable goods orders adjusted for transportation declined as consumer sentiment improved.

The greenback remained slightly unchanged at 104.05 yen after earlier surging to 104.49 on Monday, the highest level since January 23. The euro remained steady at $1.3200, up from $1.3179, its lowest level since Sept. 9. The 18-nation currency traded at 137.34 yen.

A key dollar gauge, the Bloomberg Dollar Spot Index, which monitors the U.S. currency versus 10 major peers, fell 0.1 percent to 1,029.69 at 11:24 am New York time, after earlier rising to 1,031.86, the strongest level since February 3.

“We had a big dollar move last week, so it’d be expected that you’d have a pause,” Greg Anderson, a New York-based head of global foreign-exchange strategy at Bank of Montreal, said. “Next week is a lot more important with a lot more first-tier data. I would be long the dollar.”

U.S. durable goods orders minus transportation plunged 0.8 percent in July, lagging an expected 0.5 percent gain. Total orders grew 22.6 percent, the fastest gain ever, on increased bookings for commercial aircraft. Consumer confidence also rose to the highest level in nearly seven years in August, another report showed.

Meanwhile, the Canadian dollar touched a three-month low against its U.S. counterpart and near a technical point that may push it to lows last seen in 2009. The currency fell to a low of C$1.0998 versus the U.S. dollar, the lowest level since May 2. It later rose 0.3 percent to C$1.0957 at 1:33 p.m. in Toronto. It previously touched C$1.1122 on March 26, about six days after touching C$1279, its weakest level since July 2009.

RBC Capital Markets noted that a daily close exceeding C$1.10 may potentially extend the Canadian dollar’s drop to C$1.1122, about 76.4 percent Fibonacci retracement from the March’s five year low. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com