Dollar Weakens Following Disappointing Economic Data - 28 Jan. 2011
The U.S. Dollar fell against most of its major currency rivals on Thursday's trading session. The dollar fell about 60 pips vs. the euro, and the EUR/USD pair reached a daily high of 1.3757. The greenback also dropped about 60 pips vs. the British.
The dollar fell yesterday after a report showed that the number of Americans that filed for the first time for unemployment benefits rose by 51,000 to 454,000 in the week ended in January 22. The end results failed to reach expectations for 407,000 claims. In addition, the total value of new purchase order placed with manufacturers for durable goods unexpectedly fell in December by 2.5%, failing to reach projection for a 1.6% rise.
The dollar's fall has been moderated due to some positive data. The number of Americans singing contracts to buy previously owned homes rose in December by 2.0%, following a revised 3.1% gain the prior month. Positive data from the American housing sector are vital for the economy, as this remain the most fragile sector in the industry. In addition, orders for U.S. Capital equipment increased in December for the second month in a row. Bookings for equipment like computers and communications gear climbed by 1.4 after a 3.1% gain in November.
As for today, the most significant news event from the U.S. economy looks to be the Advance Gross Domestic Product (GDP). The GDP measures the change in the value of all goods and services produced by the economy, and its release usually has a large impact on the market. Traders are also advised to follow the Consumer Sentiment report which will be released from the University of Michigan.
