Thursday, 26 March 2015 09:36
TOKYO: The dollar fell on Thursday after poor US data hurt investor confidence in the world’s top economy and threw into question the timeline for a long-awaited Federal Reserve interest rate hike.
In Tokyo, the greenback changed hands at 119.30 yen, down from 119.43 yen in New York and 119.62 yen in Asia earlier Wednesday.
The euro rose to $ 1.0975 from $ 1.0973 after an upbeat German business confidence report but it eased to 130.96 yen from 131.05 yen.
On Wednesday, the US Commerce Department reported an unexpected drop in orders for durable goods, such as cars and appliances, hinting at weakness in the economy.
The downbeat news will likely put back the Fed’s timeline on when to raise interest rates. The greenback was already facing selling pressure after the bank last week cut its projections for interest rates and economic growth.
“The dollar bull run is starting to turn,” said Dominic Bunning, a senior currency strategist at HSBC in Hong Kong.
“It’s already clear that US data is underperforming expectations, and has been for the past couple of months,” which may keep the Fed on a very slow path to raising rates, he told Bloomberg News.
Mark McCormick, a foreign-exchange strategist at Credit Agricole, added: “The dollar is vulnerable to US economic data surprises, and soft prints are likely to keep it on the back foot.”
The Fed has kept its target borrowing rate at near-zero since December 2008 at the height of the global financial crisis.
In other trading, the euro won support from the closely watched Ifo economic institute index on German business confidence, which rose in March to its highest level in eight months. Germany is Europe’s biggest economy.
The report followed another key report Tuesday that showed eurozone business activity near a four-year high in March.
Copyright AFP (Agence France-Presse), 2015
