Dollar turns broadly higher after U.S. durable goods data

Published 03/28/2012, 09:07 AM
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Investing.com - The U.S. dollar turned higher against its global counterparts on Wednesday, after data showed that U.S. new orders for long lasting manufactured goods rose less than expected last month while uncertainty over the handling of the euro zone’s debt crisis remained.

During European afternoon trade, the dollar was up against the euro, with EUR/USD edging down 0.10% to hit 1.3301.

The Commerce Department said durable goods orders rose 2.2% in February, partially reversing January's revised 3.6% decline, but fell short of expectations for a 3.0% increase.

Core durable goods orders, which exclude transportation, rose by a seasonally adjusted 1.6% in February, compared to expectations for a 1.5% gain.

Meanwhile, preliminary data showed that German consumer price inflation declined to 2.3% in March, in line with expectations, after rising by 2.5% the previous month.

A separate report confirmed earlier that the French gross domestic product grew by 0.2% in the fourth quarter, in line with preliminary estimates. In contrast, the euro zone economy contracted by 0.3% in the last three months of 2011.

The data came after upbeat comments by Italian Prime Minister Mario Monti, who said the debt crisis in the euro zone was “almost over.”

The greenback was higher against the pound, with GBP/USD sliding 0.42% to hit 1.5882.

The pound weakened broadly after official data showed that the U.K. economy contracted by 0.3% in the last three months of 2011, more than the preliminary estimate of a 0.2% contraction.

The report showed that U.K. household incomes fell by 1.2% in 2011, the largest annual decline since 1977.

A separate report showed that the U.K.’s current account deficit narrowed to GBP8.5 billion in the fourth quarter, broadly in line with expectations.

The greenback was lower against the yen but higher against the Swiss franc, with USD/JPY losing 0.11% to hit 83.08 and USD/CHF rising 0.14% to hit 0.9066.

The yen firmed up as Japanese companies moved to repatriate overseas earnings before the end of Japan’s fiscal year on March 31.

Meanwhile, the deputy governor of the Bank of Japan pledged earlier to keep monetary policy “ultra-easy” for as long as necessary to shore up growth and combat deflation.

Elsewhere, the greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD climbing 0.19% to hit 0.9968, AUD/USD dropping 0.76% to hit 1.0382 and NZD/USD retreating 0.50% to hit 0.8164.

Earlier in the day, the Reserve Bank of Australia’s semi-annual financial stability review said the injection of around EUR1 trillion into Europe's financial system by the European Central Bank had stabilized that region's banks and the global financial system.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.15% to hit 79.39.

Later in the day, the U.S. was to produce government data on crude oil stockpiles.


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