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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV