Article content
NEW YORK — The dollar fell from a
seven-week high on Monday, tracking a slide in U.S. Treasury
Article content
yields, as investors consolidated gains after the greenback’s
recent rise and looked ahead for the release of jobs data and
consumer prices for February.
The dollar’s decline was exacerbated by a
higher-than-expected drop in U.S. durable goods of 4.5% last
month, reversing a huge December boost from Boeing. These
so-called durable goods orders increased 5.1% in December.
The report dented some of the hawkishness built into U.S.
Advertisement 2
Article content
interest rates, though they are expected to remain higher for
longer, analysts said.
With February coming to an end after the dollar’s almost 3%
climb during the month on stronger-than-expected U.S. economic
data, investors are consolidating recent positions, said Joe
Manimbo, senior market analyst at Convera in Washington.
“It’s just investors pulling some chips off the table,” he
said. “We’ve had a ton of data so far, and so far it’s been
hotter than expected and that’s been the fuel for the dollar.”
The market awaits this month’s data for U.S. unemployment on
March 10 and the consumer price index on March 14, both of which
will influence Federal Reserve policy on interest rates and the
central bank’s efforts to slow inflation to its target pace.
Advertisement 3
Article content
“Until the market gets a look at the next non-farm payrolls
as well as the next consumer price index, the market is going to
be reluctant to push the dollar meaningful lower,” Manimbo said.
“The market is just realizing the road to 2% inflation is likely
to be longer and more winding.”
Investors will get more information on the state of the
global economy this week, with U.S. ISM manufacturing and
services survey data for February due on Wednesday and Friday,
respectively. Preliminary euro zone CPI inflation figures for
February are due on Thursday.
New data on Monday that showed U.S. pending home sales
posted their largest gain in 2-1/2 years failed to lift the
dollar, as recent strong economic readings have done.
Advertisement 4
Article content
The National Association of Realtors (NAR) said its Pending
Home Sales Index, based on signed contracts, jumped 8.1% last
month, the biggest increase since June 2020. Economists polled
by Reuters had forecast contracts, which become sales after a
month or two, rising 1.0%.
Traders now expect the Fed to raise interest rates to about
5.4% in July, according to pricing in futures markets
. At the beginning of February, they envisaged rates
rising to a peak of just 4.9%.
The dollar index, which measures the currency against
six major peers, fell 0.513% and is on track to snap a
four-month losing streak. Earlier it hit its highest since Jan.
6.
The euro rose 0.58% to $1.0607, while the Japanese
yen strengthened 0.20% versus the greenback at 136.20. The yen
Advertisement 5
Article content
reversed some of its gains after rising to a more than two-month
high of 136.54 earlier in the session.
Incoming Bank of Japan Governor Kazuo Ueda said on Monday
the merits of the bank’s current monetary policy outweigh the
costs, stressing the need to maintain support for the Japanese
economy with ultra-low interest rates.
Sterling rose after British Prime Minister Rishi Sunak
struck a new deal with the European Union on post-Brexit trade
rules for Northern Ireland on Monday and said it would pave the
way for a new chapter in London’s relationship with the bloc.
The pound was last at $1.2059, up 0.96% on the day.
Currency bid prices at 2:40 p.m. (1940 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Advertisement 6
Article content
Previous Change
Session
Dollar index 104.6300 105.1800 -0.50% 1.102% +105.3600 +104.5400
Euro/Dollar $1.0609 $1.0545 +0.63% -0.98% +$1.0620 +$1.0533
Dollar/Yen 136.2000 136.5250 -0.24% +3.88% +136.5400 +135.9100
Euro/Yen 144.48 143.93 +0.38% +2.99% +144.5100 +143.5800
Dollar/Swiss 0.9357 0.9411 -0.57% +1.20% +0.9428 +0.9347
Sterling/Dollar $1.2059 $1.1940 +1.01% -0.27% +$1.2065 +$1.1923
Dollar/Canadian 1.3572 1.3608 -0.27% +0.16% +1.3680 +1.3534
Aussie/Dollar $0.6740 $0.6726 +0.25% -1.08% +$0.6745 +$0.6699
Euro/Swiss 0.9925 0.9922 +0.03% +0.32% +0.9946 +0.9913
Euro/Sterling 0.8796 0.8828 -0.36% -0.54% +0.8835 +0.8790
NZ $0.6170 $0.6164 +0.13% -2.80% +$0.6180 +$0.6132
Dollar/Dollar
Dollar/Norway 10.3370 10.3890 -0.38% +5.46% +10.4270 +10.3500
Euro/Norway 10.9652 10.9527 +0.11% +4.54% +10.9970 +10.9309
Dollar/Sweden 10.3967 10.4965 -0.42% -0.10% +10.5171 +10.3890
Euro/Sweden 11.0258 11.0725 -0.42% -1.11% +11.0870 +11.0266
(Reporting by Herbert Lash, additional reporting by Harry
Robertson in London and Gertrude Chavez-Dreyfuss in New York;
Additional reporting by Ankur Banerjee in Singapore; Editing by
Ed Osmond and Angus MacSwan)
Comments
Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.
Join the Conversation