Dollar slips further after weak US durable goods data
New York (Mar 25) The U.S. dollar fell against a basket of major currencies on Wednesday after weaker-than-expected U.S. economic data combined with a robust survey of German business morale to drive more unwinding of bullish dollar bets.
The euro rose above $1.10 for a second straight session after the Commerce Department said non-defense capital goods orders excluding aircraft dropped 1.4 percent last month after a revised 0.1 percent dip in January.
The report was the latest data to suggest economic growth braked sharply early in the year and gave investors further excuse to sell dollars after a long rally in the greenback that some analysts say was overdone.
"The dollar is overbought and it's expensive, so now any U.S. data weakness we have leads investors to square up overextended dollar positioning," said Mark McCormick, currency strategist, at Credit Agricole in New York.
The stronger-than-expected German IFO indicator for March boosted the euro earlier in the session.
McCormick said the greenback remained on an uptrend given the Federal Reserve's inclination toward tighter monetary policy in the United States versus bond-buying stimulus programs in Europe and Japan.
"We're still selling euro on rallies," he said. Last week's Fed statement, which suggested a less aggressive timeline for hiking rates, has led the dollar to give back a portion of its gains.
The dollar index, which measures the greenback against a basket of six major currencies, gained about 25 percent between early May and the release of the Fed statement on March 18, but has since fallen about 2.7 percent.
"I think the dollar will remain range-bound ahead of the payrolls report next week, and I think the bias will likely be on the downside on the dollar until then," said Sireen Harajli, a foreign exchange strategist at Mizuho Corporate Bank in New York.
alternating between gains and losses for the ninth consecutive session. </p>
The euro was last up about 0.5 percent against the dollar at $1.0974 after hitting a session high of $1.10145. That remained below the $1.10625 high hit on March 18, which marked a rebound from a 12-year trough against the dollar of $1.04570 on March 16.
The dollar was last down nearly 0.2 percent against the yen at 119.52 yen. The dollar was up 0.1 percent against the Swiss franc at 0.9606 franc. The dollar index was last down approximately 0.3 percent at 96.87