Durable Goods Demand Sends Dollar Firm Against Euro
ICM Brokers | Jul 28, 2014 02:49AM ET
EUR/USD
A better-than-expected uptick in demand for durable goods in the U.S. sent the dollar firming against the euro on Friday. The Census Bureau reported earlier those U.S. durable goods orders rose 0.7% in June, beating expectations for a 0.5% gain, after declining of 1% in May, whose figure was revised from a previously estimated 0.9% contraction. Core durable goods orders, which are stripped of transportation items, grew 0.8% in June, beating expectations for a 0.6% gain, after a 0.1% downtick in May, whose figure was revised from a previously estimated flat reading.
GBP/USD
The pound declined the most in four months against the dollar last week as a rally that made it the best-performing currency in the past year was deemed to be losing momentum. Sterling fell below $1.70 for the first time in a month after retail sales increased less than economists forecast and comments from the Bank of England damped investor expectations for higher borrowing costs. Benchmark 10-year gilt yields dropped to the lowest in eight weeks as central bank Governor Mark Carney said this week that rate increases would be more restrained than in the past as “extraordinary forces” were still confronting the British economy.
USD/JPY
The U.S. dollar was steady against the yen on Friday, hovering close to two-and-a-half week highs after data showed that inflation slowed in Japan last month and as Thursday’s upbeat jobless claims data continued to support demand for the greenback. Official data showed that Japan's consumer price inflation rose 3.6% in June from a year earlier, after a 3.7% gain the previous month. Excluding fresh food, Japan CPI rose 3.3% in June from a year earlier, in line with expectations, after a 3.4% increase in May. Meanwhile, the dollar remained supported after data on Thursday showed that U.S. jobless claims fell to the lowest level in more than eight years last week.
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USD/CAD
The Canadian dollar sank to a five-week low before reports next week that are forecast to show the nation’s economy is lagging behind that of the U.S., its biggest trading partner. The currency fell for a second day against its U.S. counterpart, dropping versus all of 16 major peers. The Bank of Canada cut its growth forecast on July 16 and said the nation’s economy won’t reach full potential until mid-2016. Data due next week are projected to show U.S. employment and gross domestic product climbed. Hedge-fund managers and other large speculators stayed bullish on Canada’s dollar.
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