Dollar Hits The Skids Versus Euro
The dollar weakened against the euro and gave back its strong early gains versus the yen on Thursday, as traders sifted through a largely disappointing batch of U.S. economic data.
Jobless claims remained above 400,000 and a regional survey confirmed the manufacturing is petering out.
The dollar dropped to $1.4315 from $1.42 versus the euro, its lowest in a week. The buck came under heavy pressure in mid-day dealing, as the poor economic news cemented expectations the Federal Reserve will keep interest rates near zero all year.
Plans for another Greek rescue package remain in limbo, as Athens haggles with its neighbors and the International Monetary Fund about appropriate levels of fiscal austerity.
Matters were complicated over the weekend with the shocking arrest of IMF head Dominique Strauss-Kahn on sex crime charges, just hours before the IMF was set to meet with European officials to resolve the Greek matter.
The dollar pulled back to Y81.70 versus the yen after hitting a 3-week high of Y82.22 in early dealing.
However, the buck was clinging to its recent gains against the sterling, sticking around $1.6175.
U.K. retail sales, including automotive fuel, grew 1.1 percent month-on-month in April, data from the Office for National Statistics showed Thursday. Economists were expecting a 0.8 percent increase for the month.
From the U.S., manufacturing activity in the mid-Atlantic region grew far less than expected in May, continuing a sharp decline from a 27-year peak set two months ago, a survey released by the Philadelphia Federal Reserve revealed Thursday.
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 18.5 in April to 3.9, its lowest reading since last October.
Meanwhile, existing home sales in the U.S. unexpectedly showed a modest decrease in the month of April, according to a report released by the National Association of Realtors on Thursday, with the data likely to add to recent concerns about the outlook for the housing market.
NAR said existing home sales eased 0.8 percent to an annual rate of 5.05 million from a downwardly revised 5.09 million in March.
The number of Americans filing new applications for unemployment insurance fell for the second week in a row, according to figures released by the Labor Department on Thursday.
The 409,000 new claims in the week ended May 14th represents a drop of 29,000 claims from the previous week’s revised figure of 438,000.
