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Forex - Dollar holds steady as market shrugs off weak data

Published 08/26/2013, 03:46 PM
Updated 08/26/2013, 03:47 PM
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Investing.com - The dollar traded steadily against most major currencies on Monday as investors bet the Federal Reserve remains on track to begin tapering asset purchases this year despite spotty economic indicators such as disappointing durables goods numbers released earlier.

In U.S. trading on Monday, EUR/USD was down 0.01% at 1.3376.

The Commerce Department reported earlier Monday that U.S. durable goods orders dropped 7.3% in July, much worse than market expectations for a 4.0% decline. The July figure marked the largest decline since August 2012.

Core durable goods orders, which are stripped of volatile transportation items, fell 0.6% last month, defying expectations for a 0.5% increase.

On Friday, the Commerce Department reported that new home sales in the U.S. dropped 13.4% to 394,000 units in July, far worse than market expectations for a 1.4% decline.

The dollar weakened earlier though it did take back losses against other currencies as many market participants concluded that the Federal Reserve remains on track to begin winding down the pace of its asset purchases this year, with many convinced tapering will begin in September.

The Federal Reserve has said it will pay close attention to data before deciding on the fate of stimulus programs, and many investors were looking ahead to Thursday for the release of second-quarter GDP growth revisions and to next week's release of the August jobs report.

The greenback was down against the pound, with GBP/USD up 0.09% at 1.5582.

The dollar was down against the yen, with USD/JPY down 0.28% at 98.45, and up against the Swiss franc, with USD/CHF trading up 0.04% at 0.9222.

Bank of Japan Governor Haruhiko Kuroda said over the weekend that the bank's aggressively loose monetary policies, including asset purchases, have started to boost the economy, which gave the yen support.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.02% at 1.0500, AUD/USD up 0.09% at 0.9034 and NZD/USD trading up 0.60% at 0.7854.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% at 81.39.









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