Business Headlines

Dollar Remains Weaker as Jobs, Homes Data Make Fed Path Unclear

©2015 Bloomberg News
NNAANF6K5114

(Bloomberg) — The dollar remained weaker against major currencies from Thursday as disappointing data raised doubts about the U.S. economic outlook and the willingness of the Federal Reserve to raise interest rates. The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.6 percent to close at the lowest since April 3 in New York. It’s dropped 1.3 percent since March 31, set for the first decline in 10 months amid evidence U.S. economic growth remains uneven. Fed policy makers want to see signs of growth and inflation on the rise before committing to the first interest-rate increase in almost a decade.

“Since the Fed is data dependent, markets will react positively to good news and negatively to bad,” said Kazuo Shirai, a Los Angeles-based trader at MUFG Union Bank NA. “While there seems to be a weak tone for the dollar recently, it can spike up suddenly, making people inclined to be sidelined until a clear trend is set.” The Bloomberg Dollar Spot Index was little changed at 1,185.26 as of 8:52 a.m. in Tokyo. The dollar traded at $1.0817 per euro after snapping a three-day gain versus the common currency to close at $1.0824 Thursday. It fetched 119.59 yen from 119.58 in New York, where it lost 0.3 percent. The Fed has ruled out raising interest rates when it next meets April 28-29. Policy makers have left the door open to move in June.
A Labor Department report Thursday showed applications for U.S. unemployment benefits increased by 1,000 to 295,000 in the week ended April 18. The median forecast in Bloomberg survey of economists called for 287,000. Separately, Commerce Department data showed purchases of new U.S. homes slumped more than forecast in March from a seven-year high.

Durable Goods

MUFG Union’s Shirai said the dollar may be bought if durable goods orders are firm. Bookings for goods meant to last at least three years, rose 0.6 percent in March, swinging from a 1.4 percent drop in the prior month, according to a Bloomberg survey before the report due Friday.Demand for the dollar was also limited after Greek Prime Minister Alexis Tsipras urged an acceleration of talks with the country’s creditors to make a deal by the end of this month during a meeting Thursday with German Chancellor Angela Merkel. Euro-area finance ministers will meet in Riga, Latvia, Friday to attempt to persuade Greece to commit to economic reforms so that aid payments can be released before the country runs out of money.

–With assistance from Mika Otsuka in New York.

To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Jonathan Annells, Naoto Hosoda

The Author

Men of Value Contributor

Men of Value Contributor

Articles by various contributors to Men of Value, an online magazine for American men who value our Judeo-Christian values of faith, family, and freedom.

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *