Dollar slides as weak data back further U.S. rate cuts

Gertrude Chavez-Dreyfuss
Reuters
Wednesday, March 26, 2008

The dollar fell for a second straight session on Wednesday after an unexpected drop in durable goods orders heightened worries about the health of the U.S. economy and backed expectations of further interest rate cuts.

The dollar managed to trim its losses against the yen after a slightly better-than-expected U.S. new home sales report for February, but the data did little to ease concerns about the beleaguered sector.

Both the durable goods and housing reports contrasted with European data on Wednesday that suggested the euro-zone economy was much healthier than that of the United States despite a soaring euro and higher interest rates.

(Article continues below)

"It has not been a good environment for the U.S. dollar," said Rafael Martorell, chief dealer at BNP Paribas in New York.

"Everyday we have confirmation that the European Central Bank will keep interest rates on hold, while the U.S. economy is in pretty bad shape and that means lower rates," he added.

In midday trading, the euro rose 0.7 percent against the dollar to $1.5736, less than 2 cents away from its record high at $1.5905 hit last week. Against the yen, the dollar fell 1 percent to 99.080 yen.

The dollar dropped 0.9 percent against the Swiss franc to 0.9967 francs.

Data on Wednesday showed new orders for long-lasting U.S. goods declined 1.7 percent last month and a key measure of companies' appetite for investment also contracted, according to data from the Commerce Department.

Full article here.

Email This Page to:

 


PRISON PLANET.com     Copyright © 2002-2008 Alex Jones     All rights reserved.