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U.S. Data Weigh on Dollar

The euro and the pound were rallying against the greenback as investors remained concerned about the health of the U.S. economy.

Euros were trading for $1.4308, up from $1.426 late Wednesday, while the British pound was buying $2.0492, up from $2.0488 previously.

The dollar was already weakening when the Commerce Department announced that durable goods orders unexpectedly dropped 1.7% during September, whereas analysts had been expecting a gain of 1.5%.

Adding to the bleak picture was news from the Labor Department of higher-than-expected new claims for unemployment insurance last week. New-home sales data were more open to interpretation. Annualized sales unexpectedly rose last month, but that was after the numbers for August were revised significantly lower.

The recent information on the economy should give the Federal Reserve enough ammunition to justify a further cut to the cost of borrowing, says Ashraf Laidi, chief foreign-exchange analyst at CMC Markets in New York, in a research report.

Such a move by the Fed would make the dollar less attractive to yield-seeking currency investors.

"The only catalysts for dollar gains over the past two weeks have been unwinding of carry trades, as portfolio managers unload some of their dollar shorts to meet losses in equities," Laidi adds.

Elsewhere in the currency markets, the dollar was selling for 114.3 yen, up from 114.22 yen in the previous trading session.
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