Mar 26, 2015

Dollar Poised to Decline Amid Worst Data Misses in Six Years - Bloomberg Business

(Bloomberg) -- The dollar is set to extend this week’s declines amid signs the world’s biggest economy is slowing.
The U.S. currency declined for a second day against major peers on Thursday after an unexpected drop in durable goods orders the day before. That added to its worst slide in more than three years last week, when the Federal Reserve cut projections for interest rates and indicated the path to policy normalization would depend on the state of the recovery.
U.S. economic indicators are undershooting economists’ estimates by the most in six years, according to the Bloomberg Economic Surprise Index. The spread between the measure and a gauge of dollar strength remains near the widest on record after the currency peaked earlier this month. HSBC Holdings Plc says that suggests the greenback has further to fall.
“The dollar bull run is starting to turn,” said Dominic Bunning, a senior currency strategist at the HSBC in Hong Kong. “It’s already clear that U.S. 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 said.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.1 percent to 1,184.53 at 12:37 p.m. in Tokyo after sliding as much as 0.5 percent on Wednesday. It tumbled 2.2 percent last week, the most since October 2011, after closing at a record high of 1,222.12 on March 13.

Vulnerable Dollar

The dollar dropped 0.1 percent to $1.0978 per euro after weakening 0.4 percent yesterday. It fell 0.2 percent to 119.27 yen after sliding 0.2 percent on Wednesday.
Order for durable goods, those meant to last at least three years, declined 1.4 percent in February, following a 2 percent gain in January that was smaller than previously estimated, the Commerce Department said Wednesday in Washington. The median forecast of economists surveyed by Bloomberg was for an increase of 0.2 percent.
“The dollar is vulnerable to U.S. economic data surprises, and soft prints are likely to keep it on the back foot,” Mark McCormick, a foreign-exchange strategist at Credit Agricole SA in New York, wrote by e-mail.
Fed Chair Janet Yellen said on March 18 that policy makers will make decisions based on their latest assessment of the economic data, as officials cut their economic growth estimate for the fourth quarter of this year to 2.3 percent to 2.7 percent, down from as much as 3 percent in December.The dollar is set to extend this week’s declines amid signs the world’s biggest economy is slowing.
The U.S. currency declined for a second day against major peers on Thursday after an unexpected drop in durable goods orders the day before. That added to its worst slide in more than three years last week, when the Federal Reserve cut projections for interest rates and indicated the path to policy normalization would depend on the state of the recovery.
U.S. economic indicators are undershooting economists’ estimates by the most in six years, according to the Bloomberg Economic Surprise Index. The spread between the measure and a gauge of dollar strength remains near the widest on record after the currency peaked earlier this month. HSBC Holdings Plc says that suggests the greenback has further to fall.
“The dollar bull run is starting to turn,” said Dominic Bunning, a senior currency strategist at the HSBC in Hong Kong. “It’s already clear that U.S. 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 said.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.1 percent to 1,184.53 at 12:37 p.m. in Tokyo after sliding as much as 0.5 percent on Wednesday. It tumbled 2.2 percent last week, the most since October 2011, after closing at a record high of 1,222.12 on March 13.

Vulnerable Dollar

The dollar dropped 0.1 percent to $1.0978 per euro after weakening 0.4 percent yesterday. It fell 0.2 percent to 119.27 yen after sliding 0.2 percent on Wednesday.
Order for durable goods, those meant to last at least three years, declined 1.4 percent in February, following a 2 percent gain in January that was smaller than previously estimated, the Commerce Department said Wednesday in Washington. The median forecast of economists surveyed by Bloomberg was for an increase of 0.2 percent.
“The dollar is vulnerable to U.S. economic data surprises, and soft prints are likely to keep it on the back foot,” Mark McCormick, a foreign-exchange strategist at Credit Agricole SA in New York, wrote by e-mail.
Fed Chair Janet Yellen said on March 18 that policy makers will make decisions based on their latest assessment of the economic data, as officials cut their economic growth estimate for the fourth quarter of this year to 2.3 percent to 2.7 percent, down from as much as 3 percent in December.

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